EC launches public consultations on revised ESRS and on voluntary standard for sustainability report
EC launches public consultations on revised ESRS and on voluntary standard for sustainability report
As part of its ‘Omnibus I’ package of changes to reduce sustainability and due diligence reporting requirements in the EU, the European Commission (EC) requested the European Financial Reporting Advisory Group (EFRAG) to provide its technical advice on the simplification of the European Sustainability Reporting Standards (ESRS). This technical advice was delivered by EFRAG to the EC in December 2025.
On 6 May 2026, following additional consultations and the completion of its review of EFRAG’s technical advice, the EC issued a draft delegated act proposing amendments to the ESRS and has opened a public consultation on those amendments to the ESRS and a draft delegated act on a voluntary sustainability reporting standard for smaller companies. This forms part of the EC’s effort to simplify and reduce sustainability reporting requirements in the EU.
According to the EC, the revised ESRS reduce mandatory datapoints by more than 60% and total datapoints by over 70%. As a result, reporting costs per company are expected to fall by more than 30%.
Proposed amendments to EFRAG's technical advice on the revised ESRS
The EC has proposed a set of targeted modifications to EFRAG’s technical advice on the revised ESRS. The changes proposed by the EC are intended to facilitate practical application by clarifying key provisions and introducing additional flexibilities for undertakings, while preserving the overall objectives of the standards.
Key proposed modifications relate to the following issues:
Proposed voluntary standard for sustainability reporting
Alongside the revised ESRS, the EC has published a draft voluntary sustainability reporting standard aimed at companies that are not subject to mandatory CSRD requirements. This standard is intended to support consistent and proportionate sustainability reporting by smaller companies.
A key feature of the voluntary standard is the introduction of a ‘value chain cap’. According to this mechanism, CSRD‑in‑scope companies will not be able to require value‑chain partners with fewer than 1,000 employees to provide sustainability information beyond what is specified in the voluntary standard. This is designed to limit data requests cascading through supply and value chains and to protect smaller businesses from undue reporting pressure.
The voluntary standard builds on EFRAG’s Voluntary Sustainability Reporting Standard for SMEs (VSME), which the Commission endorsed through a recommendation in the year 2025.
Consultation timeline
Stakeholders are invited to submit feedback on both the revised ESRS and the voluntary standard to the EC by 3 June 2026.
Next steps
Following the consultation, the EC plans to adopt the two delegated acts as soon as possible. Once adopted, the delegated acts will be transmitted to the European Parliament and the Council for scrutiny under the standard no‑objection procedure, which lasts two months and can be extended by a further two months at the request of either institution. Subject to no objections, the revised standards will then be published in the EU Official Journal and will enter into force three days later.
For further information, please refer to the press release from the EC.
For the revised European sustainability reporting standards and related draft delegated regulation, please refer to the link.
For the sustainability reporting standard for voluntary use and related draft delegated regulation, please refer to the link.
On 6 May 2026, following additional consultations and the completion of its review of EFRAG’s technical advice, the EC issued a draft delegated act proposing amendments to the ESRS and has opened a public consultation on those amendments to the ESRS and a draft delegated act on a voluntary sustainability reporting standard for smaller companies. This forms part of the EC’s effort to simplify and reduce sustainability reporting requirements in the EU.
According to the EC, the revised ESRS reduce mandatory datapoints by more than 60% and total datapoints by over 70%. As a result, reporting costs per company are expected to fall by more than 30%.
Proposed amendments to EFRAG's technical advice on the revised ESRS
The EC has proposed a set of targeted modifications to EFRAG’s technical advice on the revised ESRS. The changes proposed by the EC are intended to facilitate practical application by clarifying key provisions and introducing additional flexibilities for undertakings, while preserving the overall objectives of the standards.
Key proposed modifications relate to the following issues:
- Materiality and materiality assessment
- Clarifies that undertakings are not expected to meet the specific information needs of each individual user.
- Emphasises that the objective of the standards is to ensure decision‑useful information for users.
- Introduces a clear definition of ‘informed assessment’.
- Specifies that undertakings ‘shall not’ report information that is not material, except in clearly defined circumstances (as opposed to not being required to report information that is not material).
- Reinforces that a ‘top‑down’ approach to the materiality assessment can avoid unnecessary work, including assessing each individual impact, risk or opportunity.
- Fair presentation
- Clarifies that fair presentation applies to the overall sustainability statement, not to each individual datapoint.
- States more clearly that applying ESRS results in fair presentation.
- Notes that changes to materiality and the materiality assessment also support the application of the fair presentation principle.
- Level of aggregation and disaggregation
- Provides greater discretion regarding whether specific geographical contexts need to be considered in the materiality assessment.
- Clarifies that the level of disaggregation used for the materiality assessment does not determine the level at which information must be reported.
- Omission of information
- Incorporates new provisions from the ‘Omnibus I’ Directive allowing the omission of certain information in specific circumstances.
- This includes situations where disclosure would be seriously prejudicial to the undertaking’s commercial position.
- Anticipated financial effects
- Clarifies that reporting anticipated financial effects is likely to involve estimates.
- Allows estimates to be updated as new information becomes available without constituting a reporting ‘error’.
- Confirms that omission provisions, including for commercially sensitive information, also apply to anticipated financial effects.
- Greenhouse gas emissions
- Aligns more closely with global sustainability reporting standards by giving undertakings flexibility to use either the financial control or operational control approach when defining the reporting boundary.
- Climate transition plans
- Requires undertakings with transition plans and targets not compatible with the 1.5°C target to be transparent about this fact.
- Microplastics
- Limits disclosure requirements to primary microplastics.
- Does not require reporting metrics on secondary microplastics for reasons of feasibility and proportionality.
- Emission of pollutants
- Specifies that decisions on which pollutants are material should result from a managerial assessment.
- The assessment should consider the undertaking’s activities and sector of operation.
- Substances of very high concern
- Introduces a one‑year phase‑in period for undertakings that are users of articles containing substances of very high concern.
- Coherence with the Corporate Sustainability Due Diligence Directive (CSDDD)
- Introduces technical modifications regarding due diligence to ensure better alignment with the CSDDD.
- Human rights incidents and discrimination
- Clarifies that only ‘substantiated’ incidents must be reported.
- Recognises that not all reported instances are necessarily substantiated.
- Refers to ‘ongoing’ judicial and non‑judicial proceedings rather than proceedings that have been ‘initiated’.
- Asset management activities
- Introduces provisions to prevent asset managers from having to report information about managed investments that is not relevant about the investments that they manage.
Proposed voluntary standard for sustainability reporting
Alongside the revised ESRS, the EC has published a draft voluntary sustainability reporting standard aimed at companies that are not subject to mandatory CSRD requirements. This standard is intended to support consistent and proportionate sustainability reporting by smaller companies.
A key feature of the voluntary standard is the introduction of a ‘value chain cap’. According to this mechanism, CSRD‑in‑scope companies will not be able to require value‑chain partners with fewer than 1,000 employees to provide sustainability information beyond what is specified in the voluntary standard. This is designed to limit data requests cascading through supply and value chains and to protect smaller businesses from undue reporting pressure.
The voluntary standard builds on EFRAG’s Voluntary Sustainability Reporting Standard for SMEs (VSME), which the Commission endorsed through a recommendation in the year 2025.
Consultation timeline
Stakeholders are invited to submit feedback on both the revised ESRS and the voluntary standard to the EC by 3 June 2026.
Next steps
Following the consultation, the EC plans to adopt the two delegated acts as soon as possible. Once adopted, the delegated acts will be transmitted to the European Parliament and the Council for scrutiny under the standard no‑objection procedure, which lasts two months and can be extended by a further two months at the request of either institution. Subject to no objections, the revised standards will then be published in the EU Official Journal and will enter into force three days later.
For further information, please refer to the press release from the EC.
For the revised European sustainability reporting standards and related draft delegated regulation, please refer to the link.
For the sustainability reporting standard for voluntary use and related draft delegated regulation, please refer to the link.