Arendt | EU Commission Launches Public Consultation on Revised ESRS and Voluntary Sustainability Reporting Standards

The EU Commission has launched a public consultation on draft revised European Sustainability Reporting Standards (ESRS) and voluntary sustainability reporting standards for undertakings with up to 1,000 employees. The revised ESRS aim to significantly reduce reporting burdens while preserving decision-useful information, while the voluntary standards introduce a “value chain cap” to limit information requests addressed to smaller undertakings within value chains.

Context

On 6 May 2026, the EU Commission announced a call for feedback on its draft Delegated Acts covering (i) revised ESRS and (ii) voluntary sustainability reporting standards for undertakings with up to 1,000 employees, accompanied in each case by detailed Annexes containing the relevant standards.

This initiative forms part of the Omnibus I simplification package, which aims to reduce administrative burdens under the CSRD while maintaining the quality and usability of sustainability disclosures.

Under the amended Accounting Directive (2013/34/EU), large undertakings exceeding EUR 450 million in net turnover and an average of 1,000 employees remain subject to mandatory sustainability reporting requirements. In parallel, the Accounting Directive empowers the EU Commission to adopt voluntary sustainability reporting standards for undertakings with up to 1,000 employees.

Key takeaways

The EU Commission’s package combines a substantial revision of the ESRS with the introduction of voluntary sustainability reporting standards intended for undertakings outside the scope of mandatory CSRD reporting.

With regard to the revised ESRS, the EU Commission indicates that the draft standards significantly reduce the overall reporting burden. Compared to the current framework, mandatory datapoints are reduced by over 60% and total datapoints by over 70%. The revised ESRS are described as shorter and clearer, introducing additional flexibilities for undertakings and simplifying the materiality assessment used to determine which information must be reported. Overall, the EU Commission expects these changes to reduce reporting costs per company by more than 30%.

The EU Commission further notes that the revised ESRS largely build on EFRAG’s technical advice, while also including targeted adjustments aimed at further easing reporting burdens without undermining the policy objectives of the CSRD.

In parallel, the draft Delegated Act on the voluntary sustainability reporting standards establishes a simplified framework for undertakings with up to 1,000 employees that are not subject to mandatory CSRD reporting. The EU Commission explains that the voluntary standards are designed to remain closely aligned with the VSME framework originally developed for SMEs and are considered proportionate to the size and complexity of such undertakings.

Article 3 of the draft Delegated Act for voluntary reporting standards introduces a value chain cap to disclosures identified as “necessary”. Disclosures classified as “voluntary”, “consideration when reporting sector information”, or “necessary if applicable”, as well as certain disclosures for very small undertakings (10 employees or less), are excluded from the scope of the cap.

The EU Commission further clarifies that the value chain cap applies only in the context of sustainability reporting under the Accounting Directive and does not affect voluntary data sharing, contractual obligations or other applicable legal reporting requirements.

The voluntary standards are based on the EU Commission’s 2025 Recommendation on the VSME framework, with only limited amendments introduced to ensure consistency with the revised ESRS.

Next steps

Stakeholders are invited to provide feedback on both draft Delegated Acts via the EU Commission’s “Have Your Say” portal until 3 June 2026.

Following the consultation period, the EU Commission is expected to adopt the Delegated Acts as soon as possible. They will then be submitted to the EU Parliament and the Council of the EU for scrutiny under the standard no-objection procedure (two months, can be extended by a further two months) before entering into force.

The revised ESRS are expected to apply from financial year 2027. However, earlier application from financial year 2026 may be permitted, subject to (i) the timely adoption of the revised ESRS by the EU Commission and (ii) the implementation of the CSRD into national law by the relevant deadline.

Compliments of Arendt – a member of the EACCNY