European Commission Adopts New Sustainability Standards: What Companies Need to Know
Jul 17, 2026On 3 July 2026, the European Commission adopted the revised European Sustainability Reporting Standards (ESRS) as well as the new Voluntary Sustainability Standard (VS). The aim of these changes is to simplify sustainability reporting, reduce the burden on companies, and establish a more harmonized framework for sustainability information across Europe.
The delegated acts are currently subject to scrutiny by the European Parliament and the Council and therefore have not yet entered into force.
The new developments are particularly relevant for companies with up to 1,000 employees. These companies are increasingly confronted with ESG-related information requests from customers, business partners, banks, investors, and rating agencies. Sustainability information is often requested through individual questionnaires, supplier assessments, or platforms such as EcoVadis. The new standards are intended to improve consistency and comparability of sustainability-related information in the future.
Reduced Reporting Requirements for CSRD Companies
The revision of the ESRS is part of the European Commission’s Omnibus initiative aimed at reducing regulatory burdens. According to the Commission, the number of mandatory data points will be reduced by more than 60%, leading to an expected reduction in sustainability reporting costs of more than 30%.
The revised ESRS are expected to apply to reporting periods starting in 2027. Voluntary early application for the 2026 financial year is foreseen.
From VSME to an Official EU Standard
Alongside the revision of the ESRS, the Commission adopted the Voluntary Sustainability Standard (VS). The VS builds on the former VSME Standard and, for the first time, transforms it into an official European standard for voluntary sustainability reporting.
The VS is designed for companies with up to 1,000 employees and provides a practical framework for the structured collection and disclosure of sustainability information. Its objective is to reduce the effort associated with recurring information requests and help companies respond to ESG requirements from customers, banks, business partners, and rating providers in a more efficient and standardized manner.
Value Chain Cap Intended to Reduce the Burden on SMEs
One of the most significant innovations is the so-called Value Chain Cap. Its purpose is to prevent large reporting companies from requiring disproportionately extensive sustainability information from smaller companies within their value chains.
Going forward, the VS is intended to serve as the primary reference framework for such information requests. This should help limit the reporting burden for smaller businesses and reduce the proliferation of different ESG questionnaires. Additional information requests should only be possible in justified exceptional cases, for example where required by other legal obligations. The Value Chain Cap is expected to apply from the 2027 financial year onward.
ESG Data Remains in Demand: Why Companies Should Act Now
The Omnibus package has removed many companies from the original scope of the CSRD. However, the demand for reliable sustainability information throughout supply chains and financing processes remains unchanged. Customers, banks, investors, and business partners continue to expect transparency on material sustainability issues.
For many companies, the focus is therefore shifting from complying with regulatory reporting obligations to efficiently providing standardized ESG data. Organizations that already collect and manage sustainability information in a systematic way will be better positioned to respond to information requests efficiently and prepare for future market and regulatory requirements. The Voluntary Sustainability Standard (VS) provides a pragmatic and Europe-wide framework for voluntary sustainability reporting.
DEKRA supports companies in systematically collecting and managing sustainability information, understanding the requirements of the ESRS and the VS, and efficiently providing ESG data for customer requests, ratings, and supply chain requirements. Targeted training and practical implementation support help organizations build the internal capabilities needed to respond to regulatory developments early and demonstrate their sustainability performance transparently.
Editorial Note: The European Commission adopted the delegated acts on the revised ESRS and the Voluntary Sustainability Standard on 3 July 2026. At the time of publication, these measures remain subject to scrutiny by the European Parliament and the Council. The standards will only enter into force following the successful completion of this process and their publication in the Official Journal of the European Union.
