The Commission has updated ESRS 1 – and the adjustments matter.
From a stricter materiality filter to new guidance on top‑down assessments, clearer rules on what can be omitted, a new value‑chain cap aligned with the voluntary standard, strengthen transparency around omissions, and new exemptions for investment managers under fiduciary duty, these adjustments make ESRS reporting more focused.
For companies, this means less noise, more relevance, and a clearer path to audit‑ready sustainability reporting.
If ESRS preparation is on your agenda, this overview will help you understand what’s changed – and why it matters for your 2026 reporting cycle.
Read the full article for the key takeaways and practical implications. 👇
Overview of the Key Changes
The European Commission has introduced a series of targeted adjustments to ESRS 1, refining how undertakings determine materiality, report value‑chain information, and apply exemptions. Below is a synthesis of the most significant updates.
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Reinforced Materiality Filter and Prohibition of Non‑Material Disclosures
A new clarification confirms that undertakings must not disclose non‑material information, whether prescribed by an ESRS Disclosure Requirement or arising from entity‑specific disclosures. This strengthens the materiality filter and explicitly prevents “over‑reporting” that could obscure relevant information.
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New Guidance on “Informed Assessments”
A new Application Requirement (AR 8) explains that informed assessments are the reasonable evaluations made by the category “other users of general-purpose sustainability statements” when forming decisions about the undertaking. This addition clarifies the role of non‑financial users – business partners, social partners (trade unions and employer organisations), civil society and NGOs – in the materiality logic.
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Clarified Expectations for the Top‑Down Materiality Approach
The Commission adds explanatory guidance confirming that a top‑down approach can avoid unnecessary work by allowing undertakings to conclude on materiality at topic level without assessing every individual impact, risk, or opportunity. However, a more granular assessment is required when it could change the materiality conclusion.
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Clarification on the Level at Which Materiality Is Assessed
A new AR (AR 16) explains that the level of materiality assessment is distinct from the level of aggregation for reporting. This separation ensures that undertakings can assess materiality at one level (e.g., topic or geography) while reporting at another, depending on what best supports faithful representation.
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New Rules for Undertakings Managing Investments Under Fiduciary Duty
Two new ARs (AR 17 and AR 37) introduce an important exemption:
- If an undertaking manages investments on behalf of clients under fiduciary duty and does not retain risks or rewards of ownership,
- it is not expected to assess impacts, risks, and opportunities related to those investments;
- nor is it expected to provide value‑chain data on them.
This reduces the reporting burden for asset managers operating under strict fiduciary mandates.
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Introduction of a New Paragraph on the Value‑Chain Cap
A new paragraph (66) explains how undertakings must apply the value‑chain cap when requesting information from protected undertakings in their value chain. Key points include:
- The cap covers disclosures marked as “necessary” in both the basic and comprehensive modules of the voluntary standard.
- The cap differs for undertakings above or below 10 employees.
- Disclosures marked “voluntary”, “consideration when reporting sector information”, or “necessary if applicable” are not included in the cap.
- The limitation applies equally to non‑EU undertakings in the value chain.
This addition aligns ESRS 1 with the forthcoming voluntary standard and clarifies the legal boundaries of information requests.
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Complete Rewrite of Section 7.7 on Omission of Information
The Commission has substantially rewritten the rules governing when information may be omitted. The revised section:
- Defines four categories of information that may be omitted: (a) commercially sensitive information, (b) trade secrets, (c) classified information, (d) information protected by other EU or national laws.
- Requires undertakings to disclose the use of each omission.
- Requires reassessment at each reporting date.
- Adds an AR clarifying that non‑EU undertakings’ lighter reporting obligations cannot justify omissions.
This rewrite strengthens transparency while preserving legitimate protections.
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Additional Clarifications on Anticipated Financial Effects
A new AR explains that:
- Reporting anticipated financial effects will often involve estimates.
- Revisions to estimates do not automatically constitute reporting errors.
- The omission rules in Section 7.7 also apply to anticipated financial effects.
This provides comfort to preparers and aligns ESRS with financial‑reporting logic.
Overall Impact of the Commission’s Amendments
The changes introduced by the European Commission:
- Reinforce the materiality filter, reducing unnecessary disclosures.
- Clarify expectations for top‑down assessments, value‑chain reporting, and the use of estimates.
- Introduce targeted reliefs for investment managers under fiduciary duty.
- Align ESRS 1 with the upcoming voluntary standard and the Accounting Directive.
- Strengthen transparency around omissions while protecting sensitive information.
The Commission’s updates to ESRS 1 sharpen the rules and make compliance more focused. For companies, the priority now is to tighten their materiality process, structure value‑chain requests, and apply omission rules with clear justification.
Strengthened guidance on top‑down assessments, estimates, and fiduciary‑duty exemptions gives organisations room to streamline their work – provided they document decisions and maintain traceability.
In practice, this means building a controlled, well‑evidenced ESRS workflow that avoids unnecessary disclosures, protects sensitive information, and ensures consistent, audit‑ready reporting year after year.
ESRS 1 Is Evolving – Cleerit Gets You Ready
These changes make ESRS reporting more focused – but also more demanding in terms of structure, documentation, and traceability. Cleerit is designed precisely for this.
The solution integrates the full ESRS logic – from materiality assessment and governance to ESRS compliant sustainability reporting – so you can move from interpretation to execution with confidence and ensure your disclosures flow directly into the right ESRS datapoints.
If you’d like to explore how Cleerit can support your ESRS preparation, just reach out >>
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