Simplified ESRS: fewer datapoints and a new voluntary standard for SMEs
July 3, 2026
On 3 July 2026, the European Commission adopted shorter and simplified European Sustainability Reporting Standards (ESRS) together with a voluntary standard for companies outside the mandatory scope of the Corporate Sustainability Reporting Directive (CSRD). Mandatory datapoints – individual items of information to be reported – are reduced by more than 60%, while Small and Medium-sized Enterprises (SMEs) gain a proportionate framework for responding to ESG requests from banks and supply chains.
Why were the ESRS simplified?
The reform is part of the Omnibus I simplification package and aims to reduce administrative burdens while maintaining high-quality sustainability information.
How much are datapoints reduced?
According to the European Commission, the revised ESRS reduce mandatory datapoints by more than 60% and total datapoints by more than 70%. The standards are shorter, introduce additional flexibility and simplify parts of the materiality assessment. The Commission estimates that reporting costs may fall by more than 30% per company.
What changes for SMEs outside the CSRD?
The new voluntary standard is particularly relevant for Small and Medium-sized Enterprises (SMEs). It provides a proportionate reference framework for companies that are not directly subject to the CSRD but receive Environmental, Social and Governance (ESG) information requests from banks, investors, large customers or lead companies in supply chains.
How does the value chain cap work?
The new framework also introduces a value chain cap, designed to prevent companies subject to the CSRD from passing excessive information requests on to smaller business partners beyond the voluntary standard.
What should the business do?
- companies subject to the CSRD should update their reporting matrix in line with the revised ESRS;
- SMEs outside the mandatory scope can use the voluntary standard as a common basis for responding to ESG requests;
- existing sustainability indicators should be linked, where possible, to management control, budgeting and credit-access processes;
- simplification does not remove the need for reliable, traceable and consistent data.
What are the main legal and administrative references?
References: Directive (EU) 2022/2464 (CSRD); European Sustainability Reporting Standards; Omnibus I package; European Commission adoption of revised ESRS and the voluntary standard for smaller companies on 3 July 2026.
