On May 6, 2026, the European Commission published its revised version of the European Sustainability Reporting Standards (ESRS) as a draft, based on EFRAG's proposal from December 2025. At the same time, the European Commission presented a draft of the new Voluntary Standard (VS), which is intended to replace the Voluntary SME standard (VSME) over time. The new drafts are meant to give companies more flexibility in implementation without lowering regulatory standards. Notably, the EU is responding more strongly to feedback from industry and taking practical implementation challenges into account.
Most of the changes proposed in EFRAG's draft ESRS have been retained in the European Commission's proposal. There are only a few minor adjustments.
The key changes in the proposal at a glance
1. Double materiality assessment (DMA): top-down approach preferred
The EU explicitly recommends the top-down approach for the double materiality assessment, as it is more efficient and works with available data. Where needed, companies can add entity-specific disclosures to ensure a fair presentation.
2. GHG accounting boundary: methodological choice
Unlike the EFRAG draft, which favored the “financial control approach,” the European Commission wants companies to be able to choose between the three recognized methods: financial control, equity share or operational control. This methodological freedom reflects the complexity of modern corporate structures and accounts for specific features of ownership structures and supply chains.
3. Policies, actions & targets (PAT): more efficient bundling
The draft newly highlights the option to describe a PAT that covers several material topics only once and then reference it. This reduces administrative effort and encourages integrated sustainability strategies.
4. Estimates: more tolerance for financial effects
The revised draft recognizes that estimates of financial effects are legitimate, especially when no better data is available. The key point: later adjustments based on improved data availability do not count as error corrections for previous reporting years. They are part of the normal process of improving data.
5. Microplastics: simplification for secondary microplastics
The reporting requirement for secondary microplastics is dropped, while primary microplastics remain relevant. This simplification reflects the practical limits of data collection in complex global supply chains.
6. SVHC (substances of very high concern): one-year transition period for users
Companies that process or use products containing substances of very high concern (SVHC), without manufacturing them themselves, get a one-year transition period for the related data collection. This especially relieves processors and system integrators in technically complex value chains.
7. Workforce metrics: the biggest changes
The own workforce chapter sees the most substantial changes to datapoints. Particularly noteworthy are transitional reliefs for selected S1 datapoints, which ease the data collection burden for companies.
Revised Voluntary Standard (VS) for companies with ≤1,000 employees
The new VS is aimed at companies with up to 1,000 employees that are not subject to the Corporate Sustainability Reporting Directive (CSRD), and gives them a standardized reporting framework for sustainability topics.
The current VSME is to be transferred into the new VS from fiscal year 2027 and thereby replaced. Until the VS is introduced, the VSME remains valid as a transitional solution for companies with ≤1,000 employees.
With the new VS, the EU aims to implement the “value chain cap.” This is a reduced set of requirements that specifies that companies subject to the CSRD may only request a limited scope of ESG data from smaller, non-covered companies (≤1,000 employees and ≤€450 million revenue) for their reporting. This noticeably lowers the reporting burden for companies outside the scope of the CSRD. The standard is set to take effect from fiscal year 2027.
Key takeaways on the new VS draft
- Same structure as the VSME: The VS keeps the two-module structure (Basic and Comprehensive Module), and most datapoints remain unchanged.
- Clear labeling of requirements: Each paragraph is now explicitly labeled as “necessary,” “necessary if applicable,” “voluntary” or “consideration when reporting sector information.” These labels let companies clearly understand their reporting obligations and justify the value chain cap requirements in a traceable way. Under the European Commission's current proposal, only requirements labeled “necessary” may be mandatorily requested from the value chain for CSRD reporting.
- New exemptions for micro-enterprises: Companies with ≤10 employees are to receive additional relief, for example when reporting on GHG emissions and water consumption.
- Simplifications for biodiversity: Parts of the biodiversity reporting (section B5) have been removed, as they are no longer included in the new ESRS draft either.
- Compatibility with EMAS: The VS is designed to be combinable with EMAS reports, which reduces duplicate reporting for EMAS-certified companies.
Feedback until June 3: industry needs to speak up
Companies and stakeholders can submit their comments on both drafts until June 3, 2026, via the European Commission's portal: one on the new ESRS draft and one on the VS draft.
Timeline: final version expected before year-end
- June 3, 2026: Deadline for comments (“Have Your Say”)
- Summer 2026: EU revises both drafts based on feedback
- September 18, 2026, at the latest: Targeted final publication of the ESRS and likely also the VS
- FY 2026: Optional application of the new ESRS (or the old ESRS) and VSME for companies with <= 1,000 employees
- FY 2027: Mandatory application of the ESRS and replacement of the VSME by the VS
How Tanso supports you
Tanso supports sustainability reporting under the ESRS with an audit-proof, AI-supported platform, including the double materiality assessment.
Until the final new ESRS are published, you can already write a trial report based on EFRAG's draft ESRS from December 2025. This version is integrated into our software as a filter and includes detailed descriptions of the changes compared to the old ESRS. This lets you set up the necessary data collection processes now with a reduced and adjusted reporting scope, without waiting for the final version. As soon as the final version, including the datapoint list, is published, we will map it in Tanso: both the revised ESRS and the new Voluntary Standard.
