On 3 July 2026, the European Commission adopted revised European Sustainability Reporting Standards (“Revised ESRS”) and a voluntary sustainability reporting standards for smaller companies (“VSRSSC”). The measures are designed to maintain high-quality sustainability disclosures while reducing reporting burdens for businesses, forming a key part of the EU’s broader Omnibus I simplification initiative. More information about the Revised ESRS is available at this link.

The Revised ESRS provide investors and other stakeholders with information on companies’ sustainability-related risks and impacts across environmental, social and governance topics, including climate change, biodiversity and human rights. According to the Commission, the revised standards are shorter and clearer, introduce new flexibilities, and streamline key reporting processes. A central objective of the revision is to reduce the burden on reporting companies. The Revised ESRS reduce the number of mandatory datapoints by more than 60% and the total number of datapoints by more than 70%, with the Commission estimating that these changes could lower reporting costs by more than 30% per company.

Alongside the Revised ESRS, the Commission adopted a voluntary reporting standard for smaller companies outside the scope of the Corporate Sustainability Reporting Directive (“CSRD”). The framework is intended to help these organisations respond to sustainability information requests from larger companies and financial institutions. It also introduces a value chain cap, preventing companies subject to the CSRD from requesting more information from smaller value-chain partners than is covered by the voluntary standard.

The finalised standards remain largely unchanged from the draft published in May 2026 but include several clarifications. These include confirmation that asset managers are not required to disclose sustainability information on investments managed on behalf of clients and changes aimed at improving alignment with the ISSB (International Sustainability Standards Board) standards.