On 3 July 2026, the European Commission adopted revised European sustainability reporting standards (ESRS) and a voluntary reporting standard for smaller companies.
ESRS provide investors and other stakeholders with the information necessary to understand the sustainability‑related risks to which companies are exposed, as well as their impact on both people and the environment. They encompass environmental, social, and governance issues, including climate change, biodiversity and human rights.
The revised standards aim to reduce administrative burdens for EU businesses while maintaining high‑quality disclosures. They build on the Omnibus I simplification package, which streamlined sustainability reporting in the EU and reduced the number of companies within the scope of the Corporate Sustainability Reporting Directive (CSRD).
The revised ESRS are shorter and clearer, introduce new flexibilities, and streamline key processes. They reduce the number of mandatory datapoints by over 60% and the total number of datapoints by more than 70%. Together, these changes are expected to lower reporting costs by over 30% per company.
The voluntary reporting standard provides a single, proportionate reference framework for sustainability reporting by smaller companies outside the scope of the CSRD. It will make it easier for companies not covered by the CSRD to respond to specific requests for sustainability information from large financial institutions and companies. It also introduces the value chain cap, meaning that companies subject to the CSRD cannot require companies in their value chains to provide more information than is covered by the voluntary standard.
The revised ESRS and the voluntary reporting standard will now be submitted to the European Parliament and the Council for scrutiny. The measures will apply once the two‑month scrutiny period, which can be extended by a further two months, has ended.
Related links
Implementing and delegated acts under the Corporate Sustainability Reporting Directive
Corporate sustainability reporting
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