European Commission adopts revised ESRS and New Voluntary Standard

On July 3, the European Commission formally adopted the revised ESRS (European Sustainability Reporting Standards), alongside a new Voluntary Sustainability Reporting Standard for companies outside the scope of the CSRD (Corporate Sustainability Reporting Directive).

The revised ESRS aim to make sustainability reporting more proportionate by reducing mandatory datapoints by over 60%, while the new voluntary standard introduces a common reporting framework for companies outside the CSRD scope and establishes a new value chain cap.

The formal adopted version of the ESRS took into account the feedback received during the public consultation period, which run from 6 May to 3 June 2026.

The revisions in the adopted ESRS largely follow EFRAG’s technical advice of November 2025. Importantly, the double materiality principle remains intact, rejecting proposals made by a few stakeholders during the public consultation period to separate impact and financial materiality. Requirements to benchmark workers’ wages against adequate wages, considering ILO criteria on living wages, also remain in place.

However, the Commission has weakened some important transparency requirements:

• Companies now have more flexibility in choosing approaches for calculating their greenhouse gas emissions, without the additional criteria and safeguards included in the original ESRS.
• Requirements to disclose secondary microplastics have been removed, despite their significant contribution to microplastic pollution. 
• Reporting on human rights incidents has been narrowed, allowing companies to focus on cases they consider substantiated or those confirmed through formal legal findings, rather than reporting on all complaints and ongoing cases.

For companies, the formal adoption provides greater clarity on the future expectations for sustainability reporting. At the same time, some changes raise concerns among other stakeholders such as financial institutions and NGOs about comparability, transparency, and accountability.

What happens next?

The adopted ESRS and the Voluntary Sustainability Standard for Non-CSRD companies have entered a two-month scrutiny period. If no objections are raised by the European Parliament or Council, they will enter into force following their publication in the Official Journal.

See also our previous blog on the key revisions in the draft revised ESRS of 6 May and what they mean. For even a deeper dive, please see our blog on the key revisions proposed by EFRAG in the simplified ESRS version of 30 November 2025.