The revised European Sustainability Reporting Standards (Revised ESRS) and the sustainability reporting standard for voluntary use by undertakings outside mandatory sustainability reporting requirements (the Voluntary Standard) have now been published in the Official Journal. Together, they represent an important step in the EU’s efforts to simplify sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD) and to make value chain reporting requests more proportionate.
Revised ESRS
The Revised ESRS replace the existing ESRS and are intended to reduce the complexity and volume of sustainability disclosures for undertakings within scope of the CSRD. Key changes include a reduction in the number of datapoints, a greater focus on quantitative disclosures, further differentiation between mandatory and voluntary datapoints, clarification of materiality requirements and closer alignment with global sustainability reporting frameworks.
The Revised ESRS will enter into force on 10 November 2026 and will apply to financial years beginning on or after 1 January 2027 (reports published in 2028). Undertakings reporting on financial years beginning between 1 January 2026 and 31 December 2026 (reports published in 2027) may choose to apply either the existing ESRS framework, with certain reliefs introduced by the Revised ESRS available, or the Revised ESRS.
Voluntary Standard
The Voluntary Standard is designed for undertakings that are not subject to mandatory sustainability reporting requirements. It provides a standardised framework for voluntary reporting and for responding to sustainability information requests from CSRD-reporting undertakings, banks and investors.
A key feature of the Voluntary Standard is the introduction of a value chain cap. This prevents CSRD-reporting undertakings from requesting sustainability information from undertakings in their value chain with 1,000 employees or fewer that goes beyond the disclosures specified in Annex II to the Voluntary Standard. The Voluntary Standard establishes two levels of value chain cap: one for undertakings with 10 employees or fewer and another for undertakings with more than 10 but not more than 1,000 employees. The value chain cap applies only to information requests made for sustainability reporting under CSRD and does not affect requests for information required under other EU or national laws.
The Voluntary Standard enters into force on 24 September 2026, with the value chain cap applying in respect of financial years beginning on or after 1 January 2027.
What this means for undertakings
Undertakings within scope of the CSRD should begin assessing how the Revised ESRS will affect their reporting processes, systems and materiality assessments, particularly where they are due to report for financial years beginning in 2026 and may have a choice between the existing and revised frameworks. They should also review value chain information request processes in light of the Voluntary Standard and value chain cap.
Undertakings outside mandatory CSRD reporting should consider the Voluntary Standard as a likely reference point for responding to sustainability information requests from customers, lenders, investors and other business partners. For SMEs and mid-sized businesses in particular, the value chain cap should help limit the scope of information requests from larger CSRD-reporting undertakings.
This is a significant development in the CSRD simplification agenda but not a pause in implementation. Undertakings should use the transition period to reassess reporting readiness, streamline datapoint collection and align internal sustainability reporting processes with the revised framework.
Related developments
EFRAG has also advanced three related workstreams:
- ESRS-40a: EFRAG is consulting on draft sustainability reporting standards for non-EU groups, with responses due by 31 October 2026. The standards are expected to be adopted in mid-2027 and to apply to financial year 2028, for publication in 2029.
- Datapoints: EFRAG has released the 2026 Draft List of Datapoints for the revised ESRS, with comments due by 23 October 2026 and the final resource expected by the end of 2026.
- XBRL Taxonomy: EFRAG is consulting on its draft XBRL Taxonomy for the revised ESRS, which will support machine-readable reporting and is aligned with the draft List of Datapoints mentioned above. The consultation closes on 11 November 2026, with final submission to ESMA and the European Commission expected by year-end.