- On 3 July 2026 the EU Commission finally adopted the revised ESRS and the voluntary VS Standard (formerly VSME) – as part of the Omnibus I package.
- The core relief was already in the May draft: more than 60% fewer mandatory data points, over 70% fewer data points in total and around 30% lower costs per company.
- The July step is mostly formal fine-tuning – with a few substantive clarifications on human rights, the value chain cap and the VS.
- Not yet legally binding: Parliament and Council have a 2-month scrutiny period (extendable to 4). Both can only object, not amend.
- Recommendation: use the clarity, but do not over-optimise on the basis of a draft.
On 3 July 2026 the EU Commission finally adopted the revised European Sustainability Reporting Standards (ESRS) as well as the voluntary VS Standard. The VS (Voluntary Standard) is the further development of the previous VSME (Voluntary Standard for SMEs): it has been streamlined and opened up beyond small and medium-sized enterprises into a broader voluntary standard. Throughout this article we use the new label VS. This moves a process that began with the Omnibus package a big step forward. In this article we look at what exactly was decided, whether it is already final, what has changed since the May draft – and what that means for you in practice.
What was decided on 3 July 2026?
The Commission adopted two delegated acts: the revised ESRS for CSRD-obliged companies and the voluntary VS Standard for everyone who wants to report on a voluntary basis. Both are part of the first Omnibus package, with which the EU wants to noticeably slim down sustainability reporting.
The actual relief is no surprise – it was already in the May draft and was only confirmed in July:
- More than 60% fewer mandatory data points compared with the previous ESRS set
- More than 70% fewer data points in total (mandatory plus voluntary)
- Around 30% lower costs per reporting company
- A significantly leaner structure, fewer overlaps, more flexibility
In short: the big directional decision was already made in May. The July step mainly made the package legally clean and clarified it in a few places.
Is this now final and legally binding?
No – and that is an important point to keep in mind. With the adoption by the Commission the so-called scrutiny period starts:
After adoption, the European Parliament and the Council have two months to scrutinise the package. This period can be extended by a further two months to four in total. Important: both institutions only have a right to object, but no right to amend. They can therefore either let the acts pass or reject them in their entirety – but cannot renegotiate individual data points.
In practice this means: the substance is very likely to be stable. A full objection is unlikely but formally possible. The standards only become legally binding once the scrutiny period has ended and they have been published in the EU Official Journal.
May draft vs. July version: What has changed?
If you already know the May draft, you don't have to start from scratch. The changes up to July are selective, but partly relevant. You should know these six points:
1. Human rights: now only "substantiated AND confirmed"
In the social standards S1 to S4, human rights incidents now have to be substantiated and confirmed to become reportable. "Confirmed" means a formal finding – for example by a court, an OECD complaints mechanism or an authority. Mere allegations or ongoing, unresolved proceedings therefore no longer trigger a reporting obligation.
2. Value chain cap clearly limited to Annex II of the VS
The scope of information you may request from smaller companies in your value chain is now clearly capped at Annex II of the VS Standard. This clarification protects smaller companies in the supply chain in particular from excessive data requests.
3. The VS becomes even leaner
The voluntary VS Standard has been simplified further:
- The category labels have been removed
- The thresholds for the gender pay gap have been dropped
- The definition of accidents at work has been simplified
4. Longer transition periods for E1-11
For the disclosures around anticipated financial effects (E1-11), more generous deadlines apply: the qualitative disclosures now get two years instead of one, and the quantitative disclosures four years instead of three.
5. New structural flexibility
Companies gain more freedom in the structure and presentation of their report. The standards are less rigid about the order and form in which disclosures have to be made.
6. Selective tightening
Not everything was relaxed. In a few places the Commission also tightened requirements:
- The "lost working days" metric was made more precise
- Where material, S1 now provides for mandatory targets as well as disclosures on non-employees
What does this mean for your company?
Here it is worth distinguishing between two groups.
For voluntarily reporting companies (VS)
If you are not CSRD-obliged but still want to report – for example because customers, banks or investors ask for it – the final VS is the relevant basis for you. The good news: the standard has become much leaner, and the value chain cap protects you from excessive data requests from your business partners.
In practice this means: with a VS report you can build a robust, standardised sustainability profile without shouldering the full ESRS apparatus. A structured double materiality assessment is a good starting point, showing you which topics are actually relevant for you.
Get started right away with a practical Word template: structured, easy to understand and aligned with the requirements of the current VS Standard (formerly VSME).
For CSRD-obliged companies (ESRS)
If you are subject to reporting, the revised ESRS bring noticeable relief: fewer mandatory data points, longer transition periods for E1-11 and more freedom in the structure of your report. The higher threshold for human rights incidents additionally reduces the research effort in the social standards.
Still, the double materiality assessment remains the heart of your reporting. It decides which of the reduced data points actually apply to you. Those who work cleanly here save time and resources throughout the rest of the process.
As tempting as it is to immediately trim your own process down to the last detail to match the new version: as long as the scrutiny period is running, the text is formally not yet legally binding. Align your work with the clear basic structure – materiality, data foundation, processes – but don't build elaborate special solutions around individual wordings that could theoretically still shift.
Conclusion
With the adoption on 3 July 2026, the EU Commission has created planning certainty: the revised ESRS and the voluntary VS Standard are settled in terms of content. The big relief – more than 60% fewer mandatory data points and around 30% lower costs – was already laid out in May and is now confirmed. The July changes are mostly fine-tuning, with sensible clarifications on human rights, the value chain and the VS.
The smart way forward for you: use the new clarity to tidy up your materiality assessment and your data foundations – but hold off on expensive detailed optimisations until the scrutiny period is complete and the text has been published in the Official Journal.
Frequently asked questions about the final ESRS and the VS Standard (VSME) 2026
Are the revised ESRS and the VS Standard legally binding since 3 July 2026?
No. The EU Commission has adopted the acts, but a 2-month scrutiny period (extendable to 4 months) by Parliament and Council is now running. Both can only object, not amend. The standards only become legally binding once this period has ended and they have been published in the EU Official Journal.
How much does the number of data points fall through the ESRS revision?
The number of mandatory data points falls by more than 60%, and the total number of data points by more than 70%. Costs per reporting company go down by around 30%. These figures were already in the May draft and were confirmed in July.
What changed between the May draft and the July version?
Six points above all: human rights incidents in S1–S4 now have to be substantiated and confirmed, the value chain cap is clearly limited to Annex II of the VS, the VS Standard was streamlined further, the E1-11 transition periods are longer, there is more structural flexibility and some selective tightening.
Should I already fully switch over my reporting now?
Align your work with the stable basic structure – materiality, data foundation, processes. But avoid elaborate special solutions around individual wordings as long as the scrutiny period is running and the text is not yet legally binding. Don't over-optimise on the basis of a draft.
As soon as the scrutiny period is complete and the final ESRS and the VS Standard are in the Official Journal, we'll break down for you what it means in concrete terms. The CSRD Compass newsletter delivers updates, practical tips and tool recommendations on sustainability reporting every 2 weeks.
