Final ESRS and VS Standard 2026: What has actually been decided

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 largely completes a process that began with the Omnibus package. In this article we look at what exactly was decided, what the legal status is, 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:

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?

Yes – since publication in the EU Official Journal on 21 September 2026 (update 29.09.2026). Adoption by the Commission on 3 July 2026 first started the so-called scrutiny period:

In practice this means:

• Revised ESRS (Delegated Regulation (EU) 2026/1563): in force from 10 November 2026, mandatory for financial years beginning on or after 1 January 2027. For financial year 2026, companies may choose between the previous ESRS, the previous ESRS with reliefs, and the revised ESRS (in full); the version applied must be disclosed.
• VS (Delegated Regulation (EU) 2026/1560): in force since 24 September 2026.

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:

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:

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 from financial year 2027 the value chain cap protects you from excessive data requests from your business partners – provided your company has up to 1,000 employees.

In practice this means: with a VS report you can build a robust, standardised sustainability profile without shouldering the full ESRS apparatus. A double materiality assessment is not required under the VS – but it can be useful if you want to work out strategically which topics are particularly relevant for you.

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.

Conclusion

With the adoption on 3 July 2026 and publication in the EU Official Journal on 21 September 2026, there is planning certainty: the revised ESRS apply mandatorily from financial year 2027, and the voluntary VS Standard has been in force since 24 September 2026. 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 align your materiality assessment and your data foundations with the final version – and decide which ESRS version you will apply for financial year 2026.

Frequently asked questions about the final ESRS and the VS Standard (VSME) 2026