The final revised European Sustainability Reporting Standards (ESRS) and new Voluntary Sustainability Reporting Standard (VS) have been published in the Official Journal of the European Union.
The publication follows their adoption by the European Commission in July and provides greater certainty for businesses after a lengthy period of changes to EU sustainability reporting requirements.
The revised ESRS applies to companies that remain subject to mandatory sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD). The new VS, meanwhile, provides a more proportionate approach for eligible organisations outside mandatory reporting scope.
With the final standards now published, businesses can turn their attention to what has changed and what they need to consider next. Below, we look at the key ESRS revisions, how the Voluntary Standard works, and the practical implications for businesses.
What has changed under the final ESRS?
The ESRS set out how companies subject to the CSRD prepare their sustainability disclosures. The European Commission adopted the first standards in 2023, creating detailed requirements across environmental, social, and governance topics.
The new revisions significantly reduce those requirements.
Mandatory datapoints have fallen by more than 60%, while total datapoints have been cut by more than 70%. The Commission estimates the changes could reduce reporting costs by more than 30% per company.
The revisions also:
- Shorten and clarify the standards
- Prioritise quantitative information over narrative disclosures
- Create a clearer distinction between mandatory and voluntary information
- Provide clearer instructions on applying materiality
- Improve consistency with other EU legislation
- Support interoperability with global sustainability reporting standards
The direction is clear: companies should spend less time navigating excessive reporting requirements and focus more closely on material information.
For organisations already preparing for ESRS reporting, this does not necessarily mean starting again. Instead, reporting teams can map existing processes and datasets against the final requirements and identify what they need to retain, adapt, or remove.
Less reporting, however, does not eliminate the need for reliable data. Companies still need clear ownership, appropriate controls, and internal knowledge to determine which sustainability information matters.
Double materiality remains central to ESRS reporting
Despite the simplification, double materiality remains central to ESRS reporting. The concept asks companies to consider sustainability from two connected perspectives.
Impact materiality looks at how an organisation affects people and the environment. Financial materiality considers how sustainability-related risks and opportunities could affect the organisation financially.
A sustainability matter can be material from either perspective or both. The revised framework does not remove this principle. Instead, it provides clearer instructions on how companies should apply materiality when determining what belongs in their sustainability statement.
That makes a robust materiality assessment particularly important. Businesses need to understand their significant impacts, risks, and opportunities before determining what information to report. Done well; that process has value beyond disclosure.
A materiality assessment can help decision-makers identify issues that require attention, investment, or operational action. It can also connect sustainability more closely with strategy and risk management. The aim is not simply to report less. It is to focus on what matters.
What is the new Voluntary Sustainability Reporting Standard?
The EU has also formalised a new reporting route for businesses outside mandatory CSRD reporting.
The Voluntary Sustainability Reporting Standard (VS) provides eligible undertakings with a proportionate framework for collecting and communicating sustainability information. It builds on the VSME framework developed by EFRAG and previously recommended by the European Commission.
The framework is intended for undertakings that do not exceed an average of 1,000 employees during the preceding financial year. Its purpose goes beyond producing a voluntary sustainability report.
Smaller businesses can still receive sustainability information requests from larger customers, banks, and investors even when mandatory CSRD reporting does not apply to them. The VS creates a common framework for responding to those requests without requiring businesses to adopt the full ESRS architecture.
It can also help organisations structure sustainability information for their own purposes. For companies that have already invested in sustainability reporting capabilities, this is an important distinction. Falling outside mandatory CSRD scope does not automatically make that work redundant.
Instead, organisations can consider which information remains useful to customers, lenders, investors and their own decision-makers, and adopt a reporting approach proportionate to those needs.
What does the Voluntary Standard mean for smaller businesses?
The new standard could make sustainability reporting more manageable for smaller organisations. Until now, a business outside mandatory CSRD scope could still receive multiple ESG questionnaires from larger customers, banks, and other stakeholders. Each request might use different terminology, metrics, or formats.
That creates administrative work even without a direct reporting obligation. The VS aims to establish a more consistent baseline. Consider a smaller manufacturer supplying several large European companies. Its customers may need information on emissions or other sustainability matters to understand their own value chains.
Rather than responding to entirely different information requests from each customer, the manufacturer can use the voluntary framework to organise relevant data more consistently. The reporting obligation may disappear. The demand for data may not.
That distinction matters when businesses decide whether to continue investing in sustainability reporting.
Instead of asking only, “Are we legally required to report?”, organisations can consider a broader question: “Which sustainability information does our business actually need?”
Customer expectations, access to finance, risk management, and internal sustainability goals can all influence the answer.
How does the new value chain cap work?
The interaction between mandatory and voluntary reporting becomes particularly important through the new value chain cap. Sustainability reporting requirements can create indirect demands throughout supply chains. Companies subject to the CSRD may need information from suppliers to understand their own impacts and risks.
In practice, this can leave smaller suppliers facing extensive ESG questionnaires despite having no direct reporting obligation. The value chain cap aims to limit that effect.
Under the new framework, companies subject to mandatory reporting cannot require protected businesses in their value chains to provide sustainability information beyond the datapoints covered by the Voluntary Standard.
For smaller suppliers, that should bring greater clarity and proportionality. For larger organisations, it creates a practical task. Businesses may need to review existing supplier questionnaires, procurement requirements, and ESG data requests to ensure they align with the new framework.
This is not solely a sustainability-team issue. Procurement, finance, legal, risk and compliance teams may all play a role in deciding what information the organisation requests from suppliers and why.
The value chain cap applies for financial years beginning on or after 1 January 2027.
When do the revised ESRS apply?
The publication of the final standards gives reporting organisations a clearer implementation timeline.
The revised ESRS regulation enters into force on 10 November 2026 and applies to financial years beginning on or after 1 January 2027.
Businesses also have a transitional option. For financial years beginning between 1 January and 31 December 2026, companies within scope can choose to apply either the previous ESRS or the revised standards. The regulation also provides certain reliefs for organisations that continue using the previous version during this period.
That makes the remainder of 2026 an important preparation window. Reporting teams can use this time to compare the frameworks, assess existing systems, and determine which approach best fits their circumstances.
Companies should also consider the operational implications. Changes to reporting requirements can affect data collection, internal responsibilities, assurance preparation, and reporting timelines.
Early assessment can help avoid treating the new standards as a last-minute compliance exercise.
Frequently asked questions about ESRS and the Voluntary Standard
What does ESRS stand for?
ESRS stands for European Sustainability Reporting Standards. They set out how companies subject to the CSRD prepare their sustainability disclosures.
Is the revised ESRS now final?
Yes. The revised ESRS were published in the Official Journal of the European Union on 21 September 2026. The regulation enters into force on 10 November 2026.
When do the revised ESRS apply?
The revised standards apply to financial years beginning on or after 1 January 2027. Companies within scope can also choose to use the revised standards for financial years beginning during 2026.
How much have ESRS reporting requirements been reduced?
According to the European Commission, the revised standards reduce mandatory datapoints by more than 60 percent and total datapoints by more than 70 percent.
Does double materiality still apply under ESRS?
Yes. Double materiality remains central to ESRS reporting. Companies consider both their impacts on people and the environment and sustainability-related risks and opportunities that could affect the business financially.
What is the Voluntary Sustainability Reporting Standard?
The VS provides a proportionate sustainability reporting framework for eligible organisations outside mandatory reporting requirements. It can help businesses structure information requested by customers, financial institutions, and other stakeholders.
What is the value chain cap?
The value chain cap limits the sustainability information that companies subject to mandatory reporting can require from protected businesses in their value chains. The cap reflects datapoints covered by the Voluntary Standard.
Do businesses outside CSRD scope still need sustainability data?
There can still be commercial and strategic reasons to collect it. Customers and financial institutions may request sustainability information, while businesses can use relevant data to understand risks, track performance, and support their sustainability strategy.
Conclusion
The final revised ESRS and Voluntary Sustainability Reporting Standard bring greater clarity to EU sustainability reporting. But simpler requirements do not remove the underlying work.
Businesses still need reliable ESG data, accurate Scope 1, 2 and 3 emissions measurement, credible targets and informed transition plans. They also need a clear sustainability strategy that turns this information into meaningful business action.
Future Planet helps organisations put these foundations in place, with support across sustainability strategy, ESG data management, carbon emissions, target setting, transition planning and ESG reporting, alongside certified learning that builds capability across teams.
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