A cover note from the Council of the European Union, dated 9 July 2026, transmits two Commission delegated acts that revise the European Sustainability Reporting Standards (ESRS) for large companies and introduce a voluntary reporting standard for smaller undertakings in the value chain. The acts are key deliverables of the Omnibus I simplification agenda, which entered into force on 18 March 2026.
The revised ESRS applies to companies remaining in the scope of the Corporate Sustainability Reporting Directive (CSRD) — those with more than 1000 employees and a turnover exceeding EUR 450 million — reducing the number of companies subject to mandatory reporting by about 85%. The Commission estimates annual and cumulative savings of EUR 3.7 billion over 2027-2031 from the revised standards, with trickle-down effects raising total cost savings to EUR 4.7 billion. The voluntary standard (VS) is based on the VSME standard and acts as a value-chain cap: undertakings with up to 1000 employees in the value chain of reporting entities can decline to provide information beyond what the VS requires. The value-chain cap uses a single employee-based criterion (up to 1000 employees), unlike the two-criteria CSRD scope; undertakings with more than 1000 employees but below EUR 450 million turnover fall outside both CSRD scope and the value-chain cap protection.
The European Financial Reporting Advisory Group (EFRAG) delivered technical advice by November 2025, and a public consultation ran from late July to late September 2025. The Commission must adopt the delegated act within six months of the Omnibus I Directive's entry into force on 18 March 2026.
Large companies in scope benefit from reduced reporting costs, saving an estimated EUR 3.7-4.7 billion over 2027-2031, but must still comply with a simplified but mandatory standard. Smaller undertakings (up to 1000 employees) gain protection from excessive data requests via the voluntary standard, reducing administrative burden, though they may face pressure from value-chain partners to report voluntarily. National authorities face a simpler regulatory landscape but must monitor the new scope thresholds. Investors and civil society may see reduced comparability of sustainability data due to the narrower scope and voluntary nature of the VS.
The delegated acts now await formal adoption by the Commission and subsequent scrutiny by the European Parliament and Council before entering into force.