ESG parameters: the EU Commission adopts the revision of sustainability reporting standards
The number of mandatory items on which companies are required to report has been reduced by 70 per cent. This is estimated to result in a 30 per cent reduction in costs for each organisation
Key points
Reporting on environmental, social and governance issues – including climate change, biodiversity and human rights – is being simplified. This is the aim of the revision approved on 3 July 2026 by the European Commission on ESG standards and the creation of a voluntary reporting standard for smaller companies.
Reduction in obligations
The new standards form part of the ‘Omnibus I’ simplification package, which streamlines sustainability reporting in the European Union and reduces the number of companies affected under the ‘Corporate Sustainability Reporting Directive’. The mandatory reporting items are, in fact, being reduced by 60 per cent, but if all reporting items are taken into account, the reduction is as much as 70 per cent. From an economic perspective, the Commission estimates that this measure should result in a cost reduction of more than 30 per cent per company.
The reduction in obligations and costs is, in fact, in line with the Commission’s objective of reducing the burdens associated with reporting requirements by 25 per cent. The new standards take into account the recommendations made by EFRAG, which gathered stakeholders’ views in the spring of 2025 and held a public consultation on its draft in the summer of 2025. The voluntary reporting standard, on the other hand, sets, for example, a cap on the value chain: companies subject to the ‘Sustainability Reporting Directive’ will not be able to request companies within their value chain to provide more information than is required by the voluntary standard. It will also be easier for these companies to respond to requests for sustainability information from large corporations and financial institutions.
Next steps
The delegated act revising the ESG standards and the delegated act establishing the voluntary reporting standard will now be forwarded to the European Parliament and the Council of Europe for their consideration. The measures will take effect at the end of the two-month scrutiny period, which may be extended by a further two months.
