On July 3, the European Commission adopted the delegated acts revising the ESRS and introducing the Voluntary Standard (formerly VSME). Before these delegated acts can enter into force, they must be submitted to the European Parliament and the Council of the EU for review under the no-objection procedure. This review period is two months.
VS – the EU's voluntary sustainability reporting standard
Since December 2024, the VSME (Sustainability Reporting Standard) has provided voluntary guidance for sustainability reporting by small and medium-sized enterprises. The new Voluntary Standard is now designed as a delegated regulation. This means that once it is finalized and enters into force, it will become binding EU law – even though the reporting itself will remain voluntary. The previous VSME did not have this legal status.
Erweiterter Anwendungsbereich
A key difference concerns the scope of the companies addressed. While the VSME standard was aimed at non-listed SMEs with up to 250 employees, the new standard will apply to all companies with up to 1.000 employees – regardless of whether they are listed on the stock exchange.
Furthermore, the concept of the "Value Chain Cap" provides these companies with security: Companies subject to the CSRD (Corporate Social Responsibility Directive) will no longer be permitted to request sustainability information from their supply chain and value chain partners with a maximum of 1.000 employees that goes beyond the information provided in the Voluntary Standard. The aim is to limit the reporting burden for smaller companies within the supply chain.
Changes compared to the VSME
Compared to the previous VSME, some requirements are no longer applicable in the VS:
- The GHG intensity, previously a mandatory specification, is no longer included in the new draft.
- The gender pay gap is no longer automatically mandatory.
- Requirements for biodiversity data have been significantly simplified.
- Furthermore, the standard has become more compact: 30 pages instead of 66! Compared to the draft version published on May 6, not every piece of information is uniformly marked as "mandatory", "if applicable" or "voluntary" – instead, a distinction is made according to company size (up to 10 or more than 10 employees).
Simplifying reporting: The most important changes to the ESRS
The revision of the ESRS was based on the "Draft Simplified ESRS" presented by EFRAG in November 2025. The following changes have been made compared to the previous ESRS:
- Fewer data points: The number of mandatory data points has decreased by around 61% – numerous data points have been removed, combined or simplified.
- Greater focus on materiality: In the future, reporting will focus more on what is truly material – non-material information will be omitted.
- More simplifications: Additional transitional arrangements, the "undue cost or effort" principle, and greater flexibility in special situations such as acquisitions facilitate application.
- Clearer structure: Mandatory information and supplementary information are more clearly separated, redundancies are reduced.
- New guiding principle “Fair Presentation”: The sustainability statement should convey a balanced, understandable picture as a whole – not each individual data point on its own.
- Improved compatibility: The standards have been more closely aligned with international frameworks such as ISSB and GRI to avoid duplicate reporting.
The Commission's amendments to the EFRAG draft
Compared to the EFRAG draft, the Commission has made several refinements: The materiality analysis will now explicitly follow a top-down approach, without requiring every single stakeholder's information needs to be met. The principle of "fair presentation" refers to the sustainability statement as a whole, not to individual data points. Also new is the option, adopted from Omnibus I, to withhold sensitive information under certain conditions.
For financial effects, subsequent adjustments to estimates will no longer be considered errors, and the transitional periods for qualitative and quantitative disclosures of financial effects are extended until 2028. For greenhouse gas emissions, companies can choose between financial control, operational control, or an equity-share approach.
Other adjustments include microplastics, pollutant emissions, SVHC transition periods, coordination with the CSDDD, and special rules for asset management.
Are you interested in implementing the VS (Value Sharing System) in your company? Further information can be found on our sustainability reporting website.
Your contact person at Arqum: Thomas Nienhaus
Version of 22.07.2026
The content on this page reflects the current state of affairs at the time of publication. Please note that the legal situation may change in the future.