From 1,073 datapoints to roughly 320. It is the largest cut the European Sustainability Reporting Standards have ever seen. And no, it is not bad news. It is an opportunity for companies that understand that less noise means better information.
What are the simplified ESRS
EFRAG (the body that develops European reporting standards) published a draft of simplified ESRS in December 2025. The European Commission must adopt the final version before September 2026. They will apply from fiscal years starting on 1 January 2027.
The change comes as part of the Omnibus I package, Directive (EU) 2026/470, which entered into force on 18 March 2026 and also narrowed the scope of the CSRD. For the full context, we recommend reading our analysis: CSRD Omnibus: what really changes for your company.
What changes in the ESRS
The current ESRS contain around 1,073 datapoints, many of which are voluntary. The simplified draft does three things:
1. Eliminates all voluntary disclosure requirements. What used to be “you may report if you wish” disappears. Only mandatory disclosures remain (subject to materiality).
2. Reduces mandatory datapoints to roughly 320. A 70% cut. Less narrative, more quantitative data. The idea is that companies report concrete numbers instead of lengthy texts that no one audits precisely.
3. Limited assurance only. The planned transition to reasonable assurance is scrapped. This means the level of verification will be less demanding than for financial statements. For companies, this reduces audit costs.
On top of that, the sector-specific standards EFRAG was developing are dropped. There will be no dedicated ESRS for automotive, food or energy, at least not for now. Sector guidance may come later, but not as a mandatory standard.
Double materiality stays
This is a point many overlook. The Omnibus simplifies the standards, but it does not eliminate double materiality. Companies in scope still have to assess:
- Impact materiality: how your activities affect the environment and people.
- Financial materiality: how sustainability factors affect your financial results.
This matters because double materiality is what sets the ESRS apart from other frameworks such as the ISSB (which only looks at the financial side). If you are in scope, your double materiality assessment remains the first step.
VS: the voluntary standard for those leaving scope
If your company is no longer covered by mandatory CSRD reporting and does not exceed an average of 1,000 employees, the new reference is the VS (Voluntary Standard, formerly VSME). The European Commission adopted the delegated regulation establishing it on 3 July 2026.
The regulation has not yet entered into force. It must complete scrutiny by the European Parliament and the Council and be published in the Official Journal of the European Union. It is scheduled to enter into force on the third day after publication and to apply to value chain reporting from financial year 2027.
The VS remains voluntary for protected undertakings. It does not create a general obligation to prepare a VS report or provide sustainability information. Its legal significance lies in the value chain cap: for CSRD reporting requests to protected undertakings, the VS identifies the datapoints beyond which the undertaking has a right to decline. This specific cap does not cover requests made for other purposes, including certain EU due diligence requirements.
Read our complete explanation of the Voluntary Standard and the value chain cap. Dcycle already supports this streamlined reporting framework, so companies can start with a proportionate dataset and scale when needed.
What all this means in practice
Let us be direct:
If you are in scope (more than 1,000 employees, more than EUR 450 million): The simplified ESRS will make your life easier. Fewer datapoints, more focused. But make no mistake: it is still a serious reporting exercise. Double materiality is still there. Auditing is still there (even if limited assurance). And the data you report must be traceable and auditable.
If you leave scope but supply large companies: The VS is your reference, but the protection needs to be stated precisely. For CSRD reporting requests, a protected undertaking can decline information beyond the capped datapoints. That does not prevent requests for other purposes and does not oblige you to produce a VS report. The better your data, the better positioned you are. Calculating your carbon footprint across Scope 1, 2 and 3 remains one of the most useful steps.
If you are outside everything and nobody is asking yet: Do not wait. The trend is clear: more transparency, more data, more demands from the value chain. Companies that start now will have an advantage when their turn comes.
What to do now
- Confirm your reporting perimeter. Check your average employee count, revenue and group structure before deciding whether to prepare under the ESRS or use the VS voluntarily.
- Map the data you already have. Compare your emissions, energy, water, waste, workforce and governance data with the simplified ESRS or VS requirements that apply to you.
- Review supplier questionnaires. Separate questions needed for CSRD reporting from requests made for due diligence or other commercial purposes, and identify which suppliers may be protected by the value chain cap.
Outside mandatory CSRD reporting or reviewing supplier requests? See how the VS and the value chain cap work before building your next questionnaire.
Read the VS guideThe dates that matter
- 3 July 2026: the Commission adopted the delegated regulation establishing the VS.
- Later in 2026: scrutiny by Parliament and Council, followed by publication in the Official Journal if there is no objection.
- Three days after publication: the VS regulation is scheduled to enter into force.
- September 2026: adoption of the final simplified ESRS.
- Financial year 2027: the new ESRS and the VS value chain reporting provisions are scheduled to apply.
- 19 March 2027: deadline for Member States to transpose the relevant Omnibus I provisions into national law.
The Dcycle approach
Fewer mandatory datapoints does not mean less work. It means more focused work. The 320 datapoints that remain are exactly the ones that matter: emissions, energy, water, waste, workforce, governance. They are the data your clients, investors and auditors will look at first.
Dcycle already calculates what matters. If the ESRS are simplified, all the better: it means what you already measure covers an even larger share of what will be required. And if you need to scale from the VS to full ESRS as your company grows, Dcycle lets you do it without starting from scratch.
Request a demo and discover how Dcycle structures your data once so the simplified ESRS become one of the outputs that come from it.
Frequently asked questions (FAQs)
When will the simplified ESRS apply?
The revised ESRS are scheduled to apply from financial year 2027. Companies should follow the final publication and transitional provisions before selecting the standard for a specific reporting period.
Does ESRS simplification remove double materiality?
No. Companies in mandatory CSRD scope must still assess impact materiality and financial materiality. The assessment determines which topic disclosures are material.
Has VSME been replaced by the VS?
The Commission adopted the Voluntary Standard, or VS, on 3 July 2026. It is based on EFRAG's VSME work and will replace the 2025 recommendation as the operative reference once the delegated regulation enters into force.
Is the VS mandatory for companies outside CSRD scope?
No. The VS remains voluntary and does not create a general obligation to prepare a sustainability report or provide every datapoint in the standard.
Can a CSRD company request information beyond the VS?
For CSRD reporting requests to a protected undertaking, the undertaking can decline information beyond the capped datapoints. The cap does not cover requests made for other purposes, including certain due diligence requirements.