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DG FISMA

DG_FISMA

High Impact

European Commission adopts revised ESRS and voluntary sustainability standard for smaller companies

Published

Jul 3, 2026

Topics

CSRD, European Sustainability Reporting Standards, Sustainability reporting, ESG disclosures, Value chain reporting, SME voluntary reporting

Executive Summary

On 3 July 2026, the European Commission adopted revised European Sustainability Reporting Standards (ESRS) and a voluntary sustainability reporting standard for smaller companies outside the scope of the Corporate Sustainability Reporting Directive (CSRD). The Commission states that the revised ESRS are designed to reduce administrative burden while preserving high-quality sustainability information for investors and other stakeholders. Confirmed changes include a reduction of mandatory datapoints by over 60%, a reduction of total datapoints by more than 70%, shorter and clearer standards, new flexibilities, and streamlined reporting processes. The Commission also states that expected reporting costs should fall by over 30% per company. The voluntary standard is intended to give smaller out-of-scope companies a proportionate framework for responding to sustainability information requests, and introduces a value-chain cap limiting what CSRD-scope companies may request from those companies. The measures are not yet effective: they must first pass European Parliament and Council scrutiny, with a two-month period that may be extended by two months.

What Changed

modifiedRevised ESRS adopted

Previous

The first set of ESRS applied under Commission Delegated Regulation (EU) 2023/2772 and contained the pre-revision disclosure architecture.

New

The revised ESRS are described by the Commission as shorter, clearer and more flexible, with mandatory datapoints reduced by over 60% and total datapoints by more than 70%.

newVoluntary standard for smaller out-of-scope companies

Previous

Smaller companies outside CSRD scope were not subject to mandatory CSRD reporting and could face sustainability information requests from larger companies and financial institutions.

New

Out-of-scope smaller companies may use the voluntary standard to respond to specific sustainability information requests.

newValue-chain cap

Previous

The supplied source does not identify an equivalent cap in the prior framework.

New

Companies subject to the CSRD cannot require companies in their value chains to provide more information than is covered by the voluntary standard.

modifiedAdministrative burden and cost expectation

Previous

The prior ESRS framework did not include the Commission’s newly announced reductions in datapoints and expected cost savings.

New

The Commission expects the changes to lower reporting costs by over 30% per company.

modifiedApplication subject to EU scrutiny

Previous

Before adoption, the revised ESRS were draft measures subject to feedback.

New

The measures will apply once the two-month scrutiny period has ended, unless extended by a further two months.

Business Impact

Who is affected

Directly affected

EU companies and relevant non-EU undertakings subject to CSRD sustainability reporting obligations, and smaller companies outside CSRD scope choosing to use the voluntary standard.

Indirectly affected

investors, lenders, insurers, assurance providers, ESG data vendors, parent groups, procurement teams, suppliers and other value-chain counterparties using or requesting ESRS-aligned sustainability information.

Jurisdictions

European Union, European Economic Area where CSRD rules are incorporated or applied through national implementation, Non-EU groups with undertakings or reporting obligations in scope of CSRD

Business processes

CSRD sustainability statement preparation, ESRS disclosure gap assessment, Datapoint inventory and reporting system configuration, Double materiality governance and evidence retention, Value-chain sustainability information requests, Supplier and customer ESG questionnaire management, Assurance readiness and audit trail controls

Estimated effort

High

Compliance risk

Medium

Affected Reports

CSRD sustainability statement prepared using ESRSESRS disclosure checklist and datapoint inventoryDouble materiality assessment governance fileValue-chain sustainability information request packVoluntary sustainability questionnaire or response pack for smaller out-of-scope companies
FieldValidation rule
Mandatory ESRS datapointsCommission states that mandatory datapoints are reduced by over 60% under the revised ESRS.
Total ESRS datapointsCommission states that total datapoints are reduced by more than 70% under the revised ESRS.
Value-chain information request perimeterCSRD-scope companies cannot require companies in their value chains to provide more information than is covered by the voluntary standard.
Voluntary sustainability information for smaller out-of-scope companiesThe voluntary standard provides a single, proportionate reference framework for smaller companies outside CSRD scope.

Recommended Actions

7 suggested next steps· derived from source analysis
  1. 1
    AI generatedStep 1 of 7

    Maintain current CSRD reporting plans until the European Parliament and Council scrutiny period has concluded, because the Commission states the measures apply only after scrutiny.

  2. 2
    AI generatedStep 2 of 7

    Map the current ESRS datapoint inventory against the revised standards when the adopted text is available in final legal form, prioritising mandatory datapoints removed or made flexible.

  3. 3
    AI generatedStep 3 of 7

    Reassess materiality, disclosure ownership and evidence controls for disclosures retained in the revised ESRS so that simplification does not weaken assurance readiness.

  4. 4
    AI generatedStep 4 of 7

    Update supplier and customer ESG request templates to reflect the value-chain cap for smaller out-of-scope companies.

  5. 5
    AI generatedStep 5 of 7

    Create a voluntary-standard response pack for smaller group entities or suppliers that are outside CSRD scope but receive sustainability information requests.

  6. 6
    AI generatedStep 6 of 7

    Brief finance, sustainability, procurement, legal and internal audit teams on the distinction between confirmed Commission adoption and the pending scrutiny/application step.

  7. 7
    AI generatedStep 7 of 7

    Monitor Commission CSRD pages and EUR-Lex for publication of the final delegated acts, any scrutiny extension and application guidance.

Timeline

other

Dec 14, 2022

Directive (EU) 2022/2464, the Corporate Sustainability Reporting Directive, was adopted, establishing the EU sustainability reporting framework that the ESRS support.

other

Jul 31, 2023

Commission Delegated Regulation (EU) 2023/2772 was adopted, setting the first ESRS under the Accounting Directive as amended by CSRD.

other

May 6, 2026

The Commission sought feedback on draft revised sustainability reporting standards.

publication

Jul 3, 2026

The Commission adopted revised ESRS and a voluntary reporting standard for smaller companies.

other

Jul 3, 2026

The Commission stated that the measures will be submitted to the European Parliament and Council for a two-month scrutiny period, extendable by a further two months; no fixed calendar application date is stated in the source.

Sources

AI-generated analysis is based on the following primary sources. Always verify against the official publication.

Related Evidence

Verified source support for this analysis

The evidence agent checks whether the drafted finding is supported by official publications and relevant public source material.

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