Despite the rumours, the EU is not throwing out CSRD/ESRS and replacing them with ISSB; instead, the European Commission is reportedly exploring a way to build ISSB compliance into the existing CSRD/ESRS framework, so that one EU report could also satisfy ISSB’s investor‑focused requirements.
What is actually being discussed?
A recent Responsible Investor article (summarised by several policy experts on LinkedIn) reports that the European Commission is considering a “last‑minute adjustment” to the revised European Sustainability Reporting Standards (ESRS).
According to Frédéric Ducoulombier’s summary of the article, the idea is to “allow EU companies to achieve ISSB compliance within CSRD, provided that financially material information is clearly presented and not ‘obscured’ by impact disclosures”. Lubomila Jordanova similarly describes it as “a last‑minute move to adopt ISSB standards” that could reshape the disclosure landscape, while stressing that nothing has been decided.
Taken together, these commentaries suggest a direction of travel: create a clearly identifiable ISSB‑aligned, financial‑materiality “layer” inside ESRS, rather than replace ESRS with ISSB.
Why now? The Omnibus package and simplification push
This debate sits on top of the EU’s “Omnibus” legislative package, which was proposed in 2025 and finalised in early 2026 to simplify sustainability reporting and due‑diligence rules. Deloitte notes that the Omnibus directive “aims to significantly reduce the sustainability reporting and due diligence requirements” under CSRD, the EU Taxonomy and CSDDD, including postponing application dates for later CSRD waves and committing to simplified ESRS.
Follow‑up analysis of EFRAG’s revised ESRS drafts explains that the Commission asked for fewer datapoints, clearer double‑materiality guidance and “enhancing the interoperability of the standards with other global sustainability reporting frameworks”. This explicitly includes better alignment with IFRS S1 and S2, the core ISSB standards.
At the same time, the rest of the world has been converging around ISSB. Jordanova points out that by early 2026 “21 jurisdictions have adopted these standards, from Chile and Mexico to Qatar and Japan”, while the EU has been busy cutting CSRD scope through the Omnibus deal. Other trackers and ISSB statements put the broader number of jurisdictions adopting or planning to adopt ISSB in the 30–36 range.
Against that backdrop, it becomes politically and practically attractive for the EU to make CSRD/ESRS more obviously interoperable with the ISSB “global baseline” so that multinationals are not forced into completely separate reporting tracks.
What this doesn’t mean
Despite some headlines, there is no evidence that the EU is about to scrap CSRD or abandon double materiality.
The Omnibus directive narrows scope and delays some timelines, but it does not repeal CSRD: it raises thresholds, postpones later waves and limits mandatory Taxonomy disclosures to larger entities, while still requiring in‑scope companies to report under CSRD. EFRAG’s brief for revised ESRS is to simplify and clarify double materiality, not to remove it.
Commentators warning about the change stress this point. Ducoulombier explicitly says “nothing is decided” and frames the move as an “offensive” on the “implementation battlefield of presentation and audit”, not a conceptual abolition of double materiality. Jordanova likewise notes that “the key difference between the two frameworks… hasn’t gone away”: ESRS keeps financial + impact materiality, whereas ISSB focuses on investor‑oriented financial materiality.
In other words, the legal backbone of CSRD/ESRS remains EU‑specific; the question is how far the EU will go in re‑presenting and refining ESRS so that an ISSB‑compliant subset can be clearly identified and assured.
What it could mean in practice for companies
If the Commission follows through, the most likely outcome is:
- ESRS reports are structured so that all disclosures needed for IFRS S1/S2 can be clearly grouped and labelled, enabling companies (and auditors) to assert ISSB compliance from that subset alone.
- EFRAG continues to tighten conceptual alignment on financial materiality, fair presentation and climate metrics, so the same data points and narrative can satisfy both ESRS and ISSB where requirements overlap.
- On top of that ISSB‑style “core”, EU‑specific elements remain: double‑materiality impact disclosures, EU Taxonomy alignment, and links to CSDDD and other EU legislation.
For sustainability teams, this points to a layered reporting architecture: design systems and controls so that financially material, investor‑facing information is cleanly extractable as an ISSB‑aligned package, while still meeting the broader CSRD demands around impacts and value‑chain transparency.
Sources
- Frédéric Ducoulombier, “EU weighing last‑minute move to adopt ISSB sustainability standards”, LinkedIn post, 12 April 2026 (summary of Responsible Investor article).
https://www.linkedin.com/posts/ducoulombier_eu-weighing-last-minute-move-to-adopt-issb-activity-7449444071443714048-jigA - Lubomila Jordanova, LinkedIn post on EU move to adopt ISSB and CSRD scope cuts, 12 April 2026.
https://www.linkedin.com/posts/ljordanova_sustainability-esg-issb-activity-7449437803928748032-KVFk - Deloitte, “European Commission Proposes Reduction in Sustainability Reporting Requirements” (Heads Up on Omnibus proposal), 6 March 2025.
https://dart.deloitte.com/USDART/home/publications/deloitte/heads-up/2025/eu-commission-omnibus-proposal-sustainability-reporting - Deloitte, “Omnibus Update and Proposed Revised European Sustainability Reporting Standards”, 20 August 2025.
https://dart.deloitte.com/USDART/home/publications/deloitte/heads-up/2025/european-sustainability-omnibus-reporting-standards - S&P Global Sustainable1, “January 2026 – Where does the world stand on ISSB adoption?”, 5 February 2026.
https://www.spglobal.com/sustainable1/en/insights/regulatory-tracker/issb-january-2026 - Green Central Banking, “EU and US noticeably absent from ISSB standards profiles”, 15 June 2025.
https://greencentralbanking.com/2025/06/16/eu-and-us-noticeably-absent-from-issb-standards-profiles/