The EU's Revised ESRS and New Voluntary Sustainability Standard Are Now Official

I. Simplification of the ESRS Standards

Delegated Regulation (EU) 2026/1563 amends the "ESRS" standards set out in Delegated Regulation (EU) 2023/2772.

The reform is primarily aimed at reducing the volume of information to be published and improving the readability of the standards, without calling into question their fundamental architecture. To this end, the number of mandatory datapoints is reduced by more than 60%.

The total number of datapoints has also been significantly reduced, in particular due to the removal of so-called "voluntary" datapoints.

The text also introduces greater flexibility in the application of the standards and seeks to improve their interoperability with other sustainability reporting frameworks.

II. Which Version of the Standards Should Apply?

The regulation will, in principle, apply to financial years beginning on or after 1 January 2027.

However, companies that have already published a sustainability report (referred to as "wave 1" companies) have a choice. For their financial year beginning between 1 January 2026 and 31 December 2026, they may apply either the non-revised "ESRS" standards (in accordance with Regulation 2023/2772), with certain relief measures, or the revised "ESRS" standards (in accordance with Regulation 2026/1563).

All companies must indicate in their sustainability report which version of the standards has been applied.

This transitional regime only concerns companies already subject to reporting obligations; the new framework also addresses, through a different mechanism, those that are not subject to such obligations.

III. A Voluntary Standard for Companies Not Subject to the CSRD

Delegated Regulation (EU) 2026/1560 establishes a standard allowing companies that are not subject to sustainability reporting obligations to voluntarily publish sustainability information.

There are multiple reasons that may lead a company to publish voluntarily, including:

• providing information to meet the data needs of companies subject to the disclosure obligations imposed by Directive 2013/34/EU (the "Accounting Directive"), which request sustainability information from companies in their value chain;
• providing information to meet the data needs of banks and investors, which can help these companies access financing;
• improving the management of sustainability issues they face — i.e., environmental and social challenges such as pollution, and health and safety in the workplace — in order to support their growth and strengthen their resilience in the short, medium and long term;
• contributing to a more sustainable and inclusive economy.

The Value Chain Cap

The regulation also defines a "value chain cap": companies subject to sustainability reporting obligations will not be able to request, from protected undertakings in their value chain — i.e., companies that do not exceed an average of 1,000 employees over the previous financial year, information going beyond the datapoints provided for in the voluntary standard.

This provision protects smaller suppliers, formally designated as "protected undertakings" under the delegated act. It prevents the reporting obligations of large companies from being passed on disproportionately to them.

It is important to clarify that this cap does not create a reporting obligation for protected undertakings. Rather, it limits the information that companies subject to reporting obligations can request from them as part of their value chain.

IV. Timeline

Regulation 2026/1563 on the revised ESRS was published on 21 September 2026, will enter into force on 10 November 2026, and provides for application to financial years beginning on or after 1 January 2027, subject to the transitional provisions applicable to financial years beginning in 2026.

Regulation 2026/1560, for its part, entered into force on the third day following its publication in the OJEU, i.e. 24 September 2026. Its Article 3 "value chain cap" provision — protecting undertakings that do not exceed 1,000 employees — will apply to financial years beginning on or after 1 January 2027.

Beyond simplifying reporting, these two texts are, above all, expected to change the way sustainability information flows between companies within the same value chain: large groups will no longer be able to request information from their protected undertakings beyond this scope, which should, over time, ease the documentary pressure placed on SMEs within the value chain.