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.
VSME: the voluntary standard for those leaving scope
If your company is no longer covered by the CSRD (fewer than 1,000 employees, less than EUR 450 million in revenue), the Commission will publish a voluntary standard based on the VSME (Voluntary Standard for Micro, Small and Medium Enterprises). It is expected by July 2026.
The VSME is a reduced set of disclosures: the minimum a SME should be able to report to satisfy data requests from its large clients. Because here is the reality: even if you are not required to report, your clients who are will ask you for that data. And the VSME defines exactly how far they can go.
dcycle already supports the VSME as a reporting framework. If you want to start with a reduced set and scale up when needed, you can do so from day one.
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 VSME is your reference. Your clients cannot ask for more than what it defines. But “they cannot ask for more” does not mean “you should not have more”. The better your data, the better positioned you are. And calculating your carbon footprint (Scope 1, 2 and 3) is the data point they will request most, whether or not it is in the VSME.
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.
The dates that matter
- July 2026: publication of the VSME as a voluntary standard by delegated act.
- September 2026: adoption of the final simplified ESRS.
- January 2027: the new ESRS apply for the first fiscal year.
- March 2027: deadline for Member States to transpose the Omnibus 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 VSME to full ESRS as your company grows, dcycle lets you do it without starting from scratch.
Request a demo and discover how dcycle can help you comply with the new simplified ESRS.