The European Commission adopted revised ESRS(European Sustainability Reporting Standards) in July 2026. The focus is consistent: reducing reporting burden. The simplification of ESRS, which had been under public consultation, has now advanced through formal adoption.
Mandatory data points cut by more than 60%
The core of the revision is simplification. The revised ESRS cuts mandatory data points by more than 60%, which is expected to reduce reporting costs per company by more than 30%. The aim is to narrow the reporting items that expanded with full CSRD implementation and rebalance practical burden against the usefulness of information. In effect, regulators are responding to corporate concerns about overly detailed disclosure requirements.
New voluntary standard for SMEs outside CSRD
Another pillar is support for SMEs. A voluntary reporting standard, equivalent to VSME, has been created for SMEs that are not directly in scope of CSRD. This also responds to the burden faced by SMEs in large-company supply chains, where customers may request many different forms of disclosure. A common voluntary standard should make it easier for SMEs to avoid excessive one-off responses.
Procedure: scrutiny before entry into force
The adoption is a step toward finalizing simplification, but it does not take effect immediately. The delegated act for the revised ESRS will enter into force after a two-month scrutiny period by the European Parliament and the Council, extendable to four months. The content reflects technical advice from EFRAG(European Financial Reporting Advisory Group) and stakeholder consultations held in spring and summer 2025. The final application timing and details will be settled through this scrutiny.
Implications for Japanese companies
For Japanese suppliers asked by European customers to provide sustainability information, the simplification is an opportunity to redesign practice. Rebuilding CSRD/CSDDD supply-chain responses around a narrower set of requested data points is key to maintaining business while containing burden. Because scrutiny remains before entry into force, the realistic approach is to prepare while watching for final information.
Data points cut by over 60%
Mandatory items are narrowed substantially, making the focus of reporting clearer.
Reporting costs down over 30%
Reporting burden per company is expected to fall significantly.
Voluntary SME standard
A voluntary reporting standard equivalent to VSME is created for SMEs outside the CSRD scope.
Scrutiny before entry into force
The delegated act enters into force after two to four months of scrutiny by the European Parliament and the Council.