Precisely for this reason, 2026 offers a unique opportunity: a year to begin—without formal consequences—with building, testing and improving the processes, data, governance and narrative needed for mature reporting. It is a year in which you can practise, learn and improve, thereby building a clear lead for the moment when the obligation actually comes into force.
Our experience shows that those who start now learn more and gain more value from the preparation year. In this article, we outline what this strategic transition year entails, why it offers opportunities right now and what a transition report might look like.
Two‑year delay, simplified standards and fewer mandatory companies
The context of mandatory sustainability reporting is shifting. The three most important developments are:
- The reporting obligation under CSRD has been delayed by two years for large undertakings and listed SMEs.
- EFRAG has submitted its technical advice on the draft simplified ESRS to the European Commission.
(Read more about this here)
- The number of companies falling under the CSRD obligation has decreased.
Would you like to learn more about these developments? Read more here.
Although some elements, such as the simplified European Sustainability Reporting Standards (ESRS), have not yet been fully adopted, it is strategically important not to wait. The draft standards are available, which means that organisations can already work with concrete guidance and prepare substantively. Those who start now create time savings, insight and agility, and strengthen their organisation’s impact and future resilience.
What is a strategic preparation year?
This is a year in which organisations voluntarily report according to the CSRD framework, without that reporting being subject to audit requirements. It offers the opportunity to develop and test processes, data and governance in a way that fits the organisation and the future obligation for FY2027.
Due to the delay, many organisations deliberately chose to spend 2025 further shaping their sustainability themes. That was valuable, but it meant that the reporting component often received less priority. 2026 is therefore the moment to look forward again and fully address the reporting workstream.
Organisations can set their own priorities this year: from fully applying the reporting standards to one topic, to applying them in outline with voluntary assurance on specific components to spread future workload.
The strategic opportunities of 2026
Setting up sustainability reporting in 2026 delivers direct strategic value. This preparation year offers five concrete advantages.
- You discover blind spots in risks and opportunities
The Double Materiality Assessment (DMA) reveals risks, impacts and strategic opportunities that were not yet fully visible internally. For most organisations, 2026 will involve recalibrating the DMA: reassessing which topics are material based on recent developments in the value chain, new insights from stakeholder dialogues and evolving risks such as climate‑related risks. By going through this process carefully now, you discover where your sustainability strategy needs refining and can already act accordingly this year.
- You can set your own focus and priorities in the transition report
In 2026, you still have the freedom to steer yourself: you focus on strategically relevant topics and build a strong narrative about how your organisation creates long‑term value. You choose which topics to deepen, where you want to experiment with reporting and which components you want to strengthen further.
Once the reporting obligation begins, the ESRS framework determines which information you must include. By making deliberate choices now, you maintain control of your story and ensure the reporting remains close to the organisation.
- You build a strong governance structure
A strong governance foundation is essential for reliable sustainability reporting. It starts with clear roles, responsibilities, decision‑making and documentation. Data plays a crucial role. By setting up governance effectively in 2026, you simultaneously lay the foundation for broader management processes within the organisation.
Robust governance creates structure in data flows, internal decision‑making and safeguarding progress on sustainability goals. This results in consistent and reliable information for internal and external stakeholders. In this way, a governance foundation emerges that strengthens both the reporting process and the wider business operations.
- You get your data landscape in order
This year offers the perfect opportunity to start collecting or improving sustainability data. Think of harmonising data definitions, securing data flows, testing tooling and building internal controls. Many organisations discover only later that data is dispersed, time‑consuming to collect and sometimes incomplete. By starting now, you gain time to improve quality before the obligation comes into force.
- You are already having the right conversations with the auditor
A preparation year provides space for conversations with auditors without urgency. You can implement adjustments without time pressure and have your approach, documentation and processes reviewed. You can also choose to obtain voluntary assurance on specific, already mature components. This gives you early feedback and helps you build internal assurance faster. Since assurance is expected to become mandatory from FY2027 for organisations meeting certain size criteria, a focused assurance preparation in 2026 is a valuable way to test the process and get your organisation ready in time.
Tips for a transition report
A transition report is a report in which you apply the ESRS framework in a way that matches your current maturity. You make strategic choices that determine what your report looks like, the level of detail and the value it delivers. Practice shows that setting up processes, aligning with stakeholders and testing data flows often takes more time than expected. Therefore, three recommendations:
- Choose a clear content focus
The most effective approach is applying the BAIT structure: Policies, Actions, Indicators and Targets. This allows you to describe how you manage material impacts, risks and opportunities, and how performance and progress are measured. This helps you practise the core logic of the ESRS and build a consistent narrative. For organisations already more advanced in sustainability reporting, it may also make sense to consider integrated reporting a direction many organisations are moving towards.
You can also choose to fully elaborate on specific themes, such as climate change or your own workforce. You will then go through all the requirements, KPIs and governance elements. This gives a realistic impression of what full reporting in FY2027 requires and helps you experience workload and data needs early. It also provides a strong foundation for these components in the following year.
- Make a deliberate choice for simplified ESRS
For many organisations, it is logical to report in 2026 according to the simplified ESRS, provided that this is also the standard you may apply in FY2027. The simplified ESRS are more concise, contain fewer data points and offer more room to work with the core logic of the standards. They therefore fit well with the purpose of a transition report: learning, testing and maturing reporting in a manageable way.
Note: not every organisation may use the simplified standards once the reporting obligation begins. Check in advance which options apply to your organisation.
- Choose voluntary assurance on a specific component
Voluntary assurance can be valuable in 2026. It is not mandatory, but it offers the opportunity to gain early insight into where documentation, processes or data quality still fall short. By having one or several topics reviewed voluntarily, you receive direct feedback and build internal assurance more quickly. Because assurance is expected to become mandatory from FY2027 for organisations meeting the applicable size thresholds, early assurance preparation in 2026 is a valuable way to test the process and prepare your organisation in time.
Would you like more background on how to build a strategic and consistent reporting structure? In our whitepaper ‘From reporting to progress’, you will find a step‑by‑step guide, examples and practical tools.
Conclusion: 2026 is the year of strategic advantage
Those who make optimal use of 2026 benefit from a strategic lead in 2027:
- Greater ability to steer on impacts, risks and opportunities
- Stronger governance and data processes
- Better preparation for audit review
- A robust strategic narrative for external and internal stakeholders
- A clear long‑term value creation pathway
Would you like to explore how your organisation can use the preparation year strategically?
Grant Thornton Impact House helps you create clarity, set priorities and use the transition report as an opportunity for strategic direction. Together, we turn your preparation year into an advantage.
Would you like to discuss these insights further? Get in touch with us.
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