ESRS Simplified, VSME Created: What the Commission’s 6 May Consultation Means Right Now

On 6 May 2026, the European Commission launched a one-month consultation on two draft delegated acts that mark the final legislative step in the Omnibus I simplification. The revised ESRS reduce mandatory datapoints by over 60% and total datapoints by over 70%, cutting estimated reporting costs per company by more than 30%.

The voluntary reporting standard (VSME) creates a new framework for companies with up to 1,000 employees and introduces a statutory value-chain cap — legally prohibiting CSRD-in-scope companies from requesting sustainability information from smaller supply chain partners beyond the voluntary standard’s scope. The cap applies to both EU and non-EU entities in the value chain.

The Commission has rejected proposals to permit ISSB substitution: double materiality is retained as the defining feature of the EU standard. The most consequential change from EFRAG’s December 2025 technical advice is the strengthened prohibition on immaterial disclosure — undertakings “shall not” report immaterial information, making non-materiality determinations an auditable governance process rather than a reporting discretion.

Other significant changes: fair presentation applies to the sustainability statement as a whole rather than each individual datapoint; new flexibilities on anticipated financial effects, including a competitive-harm carve-out; GHG boundary adjustments aligning more closely with IFRS S1; and sector-specific ESRS replaced with optional sector guidance.

Consultation closes 3 June 2026. Commission adoption is expected Q2 2026, ahead of the mandatory 17 September 2026 deadline. Revised ESRS apply mandatorily from FY2027; CSRD-in-scope FY2026 reporters may opt in early. Immediate action: audit supplier information requests against the value-chain cap before the standard enters force.