The revised ESRS and the Voluntary Standard are now official
Both delegated regulations have been published in the Official Journal of the European Union. After months of drafts, consultations and technical advice, companies finally have legal certainty about how sustainability reporting in the EU will look going forward. Two texts matter here: the revised European Sustainability Reporting Standards (ESRS) and a brand new Voluntary Standard, often shortened to VS.
At Dcycle we have spent the last two years helping companies build the data infrastructure behind their CSRD reporting, and the single most common question we hear is some version of “how do we do less of this without losing the parts that actually matter?” These two texts are the regulator’s answer to exactly that question. Below is what changed, what did not, and what we would tell a sustainability lead to do about it this quarter.
What the revised ESRS actually change
For companies still inside the scope of the CSRD, meaning more than 1,000 employees and over 450 million euros in net turnover, the foundation has not moved. Double materiality remains the starting point of the whole exercise. If you were expecting the revision to quietly retire double materiality, it did not.
What did change is the volume and the flexibility. According to the European Commission, the revised standards cut mandatory datapoints by more than 60% and total datapoints by more than 70%. That is not a rounding adjustment. It is a structural slimming of the framework. Alongside the cut, the revision:
- Simplifies the materiality assessment, which is where most companies burned the most hours in their first cycle.
- Introduces additional reliefs, so smaller and less mature reporters are not held to the same granularity as a listed multinational.
- Streamlines the structure of the standards themselves, making them easier to read and to map to your data.
- Improves interoperability with international standards, which matters if you also report under ISSB or answer investor questionnaires built on other frameworks.
In our experience the datapoint reduction is welcome, but it is not the hard part. The hard part was never counting the datapoints. It was collecting reliable data for them across dozens of business units and suppliers. A shorter standard helps, but only if your underlying data collection is already automated and auditable. Companies that treated the first ESRS cycle as a spreadsheet exercise will still struggle with the second one, just with fewer cells.
The dates you need to plan around
Timing is where teams get caught out, so keep three dates in view.
The revised ESRS apply to financial years beginning on or after 1 January 2027. For financial years beginning in 2026, you have a choice: you may adopt the revised ESRS early, or you may continue with the existing ESRS, including the Quick Fix, and still make use of selected new reliefs. The regulation itself enters into force on 10 November 2026.
Our advice is not to treat 2027 as a distant deadline. The reliefs available for 2026 are worth mapping now, because deciding whether to early adopt is itself a piece of work: it depends on how far along your current data model is and whether the revised structure fits it better than the one you built for the first cycle.
A new Voluntary Standard, and it is not just for SMEs
The 2025 VSME recommendation is being superseded by a legally anchored Voluntary Standard. This is a meaningful upgrade in status: a recommendation is guidance, a delegated regulation is law.
The most misread point is scope. The VS is not limited to small and medium enterprises. Any undertaking outside the mandatory CSRD scope may use it. It is built from a Basic Module and a Comprehensive Module, and it is designed to serve two jobs at once: internal sustainability management, and answering the information requests that increasingly arrive from customers, investors and banks.
For a company that has just fallen out of mandatory CSRD scope after the Omnibus revision, the VS is the obvious landing place. It gives you a credible, standardized way to keep reporting to the counterparties who still ask, without carrying the full weight of the ESRS. If you are fielding supplier questionnaires or bank ESG requests, the VS is the format worth standardizing on.
The Value Chain Cap, and its important limit
The VS also provides the basis for the Value Chain Cap, the mechanism that protects smaller companies from being asked for unlimited data by the large companies above them in a value chain.
Here is the distinction that gets lost: the Value Chain Cap does not cover the entire VS. For the purposes of CSRD reporting, only the datapoints specifically listed in Annex II form the upper limit of what a large reporter may request from value chain undertakings with up to 1,000 employees. So if you are a large company preparing your ESRS report, you cannot demand more than Annex II from your smaller suppliers, and if you are one of those suppliers, Annex II is the shield you can point to. The Value Chain Cap applies to financial years beginning on or after 1 January 2027.
This is where the two texts connect in practice. Your ESRS report defines what you must disclose. The Value Chain Cap, drawn from the VS, defines what you are allowed to pull from partners who are not themselves in scope. Getting that boundary right is as much about supplier relationships as it is about compliance.
What we would do this quarter
Concretely, three steps:
- Decide on early adoption. Model your 2026 financial year against both the existing ESRS with reliefs and the revised ESRS, and pick the path that fits your existing data model.
- Re-scope your materiality assessment against the simplified process, rather than carrying forward last year’s version untouched.
- If you are out of mandatory scope, or you sit in someone’s value chain, set up the VS Basic Module and use Annex II as your reference for what you will and will not share.
None of this requires waiting until 2027. The teams that will report calmly are the ones treating the next twelve months as preparation, not as a countdown. If you want to see how automated data collection and audit readiness map onto the revised framework, request a demo and we will walk through it with your actual reporting boundary.
Frequently asked questions (FAQs)
When do the revised ESRS start to apply?
They apply to financial years beginning on or after 1 January 2027. For financial years beginning in 2026 you may adopt them early, or stay on the existing ESRS including the Quick Fix while using selected new reliefs. The regulation enters into force on 10 November 2026.
How much have the datapoints been reduced?
According to the European Commission, mandatory datapoints fall by more than 60% and total datapoints by more than 70%, alongside a simplified materiality assessment and a streamlined standard structure.
Is the Voluntary Standard only for SMEs?
No. Any undertaking outside the mandatory CSRD scope may use it, not only small and medium enterprises. It has a Basic Module and a Comprehensive Module and supports both internal management and external information requests.
What is the Value Chain Cap and what does it limit?
It caps the information a large CSRD reporter can request from value chain undertakings with up to 1,000 employees. Crucially, only the datapoints listed in Annex II form that upper limit, not the whole Voluntary Standard. It applies to financial years beginning on or after 1 January 2027.
Does double materiality still apply under the revised ESRS?
Yes. For companies inside CSRD scope, double materiality remains the foundation of sustainability reporting. The revision simplifies the assessment process but does not remove the principle.