EU revises sustainability reporting standards, reducing burden on businesses.

The European Commission has adopted a revised set of European Sustainability Reporting Standards, along with a voluntary reporting standard for smaller businesses. This move aims to simplify sustainability reporting in the EU, reducing the administrative burden on businesses while maintaining a high level of information disclosure.

The European Sustainability Reporting Standards cover environmental, social, and governance issues, including climate change, biodiversity, and human rights. These standards help investors and stakeholders better understand the sustainability risks that businesses may face, as well as the impact of businesses on people and the environment.

This revision is part of the Omnibus I simplification package, designed to streamline sustainability reporting in the EU and reduce the number of businesses covered by the Corporate Sustainability Reporting Directive.

According to the European Commission, the revised standards are more concise and clearer, adding new flexible mechanisms and streamlining the materiality assessment process. Specifically, the number of mandatory data points has been reduced by more than 60%, while the total number of data points has been reduced by more than 70%. These changes are expected to reduce reporting costs by more than 30% per business, aligning with the goal of reducing the reporting burden by 25%.

The revised standards were developed based on technical advice from EFRAG, formerly known as the European Financial Reporting Advisory Group. EFRAG's recommendations are based on stakeholder input in the spring of 2025, as well as public consultations on the drafts in the summer of 2025.

In addition, the European Commission has proposed a number of targeted adjustments aimed at further reducing the reporting burden without compromising the policy objectives of the Corporate Sustainability Reporting Directive. Stakeholders were consulted through a “Have Your Say” call for feedback this spring.

For smaller businesses that fall outside the scope of the Corporate Sustainability Reporting Directive, the new voluntary reporting standard will provide a more consistent and relevant framework. This standard makes it easier for businesses to meet sustainability reporting requirements from large financial institutions and large corporations.

Notably, the voluntary standard also sets a limit on the value chain. Accordingly, businesses falling within the scope of the Corporate Sustainability Reporting Directive cannot request more information from businesses in the value chain than what is stipulated in the voluntary standard.

Authorization documents relating to amendments to the European Sustainability Reporting Standard and the establishment of voluntary reporting standards will be submitted to the European Parliament and the Council of the European Union for consideration. These measures are expected to come into effect after the conclusion of a two-month review period, which may be extended by another two months.

Adjusting sustainability reporting standards shows the EU's efforts to balance the need for transparency with the enforceability of regulations by businesses. For businesses involved in international supply chains, especially those with partners in the EU market, this is an important signal that sustainability reporting continues to be a trend that needs to be seriously monitored and prepared for.

Sources: Translated and edited from European Commission, article "Commission adopts revised sustainability reporting standards to reduce administrative burdens for EU businesses while maintaining high-quality disclosures", posted on July 3, 2026, Directorate-General for Financial Stability, Financial Services and Capital Markets Union.

Link to the article: https://finance.ec.europa.eu/news/commission-adopts-revised-sustainability-reporting-standards-reduce-administrative-burdens-eu-2026-07-03_en