The European Commission has released proposed ESRS revisions to the European Sustainability Reporting Standards (ESRS) along with a new voluntary sustainability reporting standard aimed at reducing complexity, lowering reporting burdens, and improving accessibility for companies outside mandatory CSRD scope.
The proposals form part of the EU’s broader Omnibus simplification initiative focused on streamlining sustainability compliance while maintaining transparency, comparability, and assurance readiness across ESG disclosures.
According to the European Commission, the revised ESRS would reduce mandatory datapoints by more than 60% and total datapoints by over 70%, introducing shorter and clearer standards with greater implementation flexibility. The Commission estimates these changes could reduce reporting costs by more than 30% per company.
The consultation package also introduces a voluntary sustainability reporting standard designed for companies outside mandatory CSRD requirements. The framework is intended to support SMEs and other organizations seeking structured ESG disclosures while limiting excessive value-chain reporting requests from larger companies.
Key Proposed Changes
The revised ESRS proposals include:
- Reduction of mandatory disclosure datapoints by approximately 61%
- Elimination of all previously voluntary disclosure datapoints, contributing to a total datapoint reduction exceeding 70%
- Simplified materiality assessment processes
- Greater flexibility in greenhouse gas inventory boundary approaches
- Improved clarity and usability of reporting requirements
- Protection mechanisms limiting excessive ESG data requests across value chains
- Additional implementation relief for smaller and less complex organizations
Notably, the revised ESRS retain the EU’s double materiality approach. Companies will still be required to report both:
- How sustainability issues financially impact the organization
- How the organization impacts society and the environment
The decision signals that while the EU is pursuing simplification, it is not moving toward full alignment with ISSB-style single materiality reporting. Instead, the revised ESRS preserve the EU’s broader sustainability reporting philosophy centered on accountability, impact transparency, and stakeholder-focused disclosures.
The revised drafts largely follow recommendations submitted by EFRAG in late 2025, while incorporating targeted modifications from the European Commission to improve implementation practicality, consistency, and reporting usability.
The Commission has opened a one-month public feedback period closing on June 3, 2026. Following the feedback period, the delegated acts are expected to be formally adopted as soon as possible, subject to scrutiny by the European Parliament and the Council under the EU’s no-objection procedure.
Why This Matters
The update signals a major shift in how sustainability reporting may evolve across Europe. While the EU continues reinforcing ESG transparency and digital reporting expectations, the revised ESRS demonstrate a stronger emphasis on proportionality, implementation feasibility, and operational efficiency.
The revised ESRS proposals also follow broader changes introduced through the EU Omnibus package, which significantly reduced the number of companies expected to fall under mandatory CSRD reporting requirements. The revised scope raises reporting thresholds compared to the earlier framework, reducing applicability for many mid-sized organizations previously expected to comply.
At the same time, the retention of double materiality confirms that the EU remains committed to a broader sustainability accountability model despite growing global convergence discussions around ISSB frameworks.
Organizations preparing for CSRD and ESRS compliance should closely monitor these developments, reassess reporting readiness strategies, and evaluate how the revised standards could impact disclosure processes, governance structures, and ESG data management programs.
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As sustainability regulations continue to evolve, organizations need flexible and scalable ESG reporting infrastructure to stay compliant and audit-ready.
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