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CSRD: ESRS & VSRS ADOPTED
The European Commission has adopted two delegated acts as part of the CSRD simplification under the Omnibus I package:
- Revised European Sustainability Reporting Standards (ESRS) which streamline and simplify CSRD reporting requirements.
- Voluntary Sustainability Reporting Standard (VSRS) for smaller companies outside the CSRD’s scope. CSRD reporting companies may not require their value chain counterparties to provide information beyond what the VSRS covers (known as the “value chain cap”).
The revised ESRS apply from financial years beginning 1 January 2027. Companies subject to CSRD obligations for financial years beginning in 2026 may elect to apply the revised ESRS early.
The delegated acts are now subject to a two-month scrutiny period by the European Parliament and the Council of the EU (extendable by a further two months). Publication in the Official Journal and entry into force is anticipated in Q4 2026.
CSRD: ESRS for Non-EU Undertakings
EFRAG is consulting on its ESRS for Certain Non-EU Undertakings (ESRS-40a) i.e. sustainability reporting standards for undertakings in scope of Article 40a of the Accounting Directive. The consultation closes on 31 October 2026.
ESRS-40a are anticipated to be adopted by the European Commission in mid-2027 with the first sustainability reports prepared under ESRS-40a expected to cover financial year 2028 (publication in 2029).
Taxonomy Disclosures Delegated Act
The European Supervisory Authorities (ESAs) (the EBA, EIOPA and ESMA) are consulting on selected key performance indicators (KPIs) and other aspects of the Taxonomy Disclosures Delegated Act under Article 8 of the EU Taxonomy Regulation.
Comments can be made on the papers until 12 August 2026. The ESAs’ responses are due in October 2026 and the Commission intends to adopt amendments by Q1 2027.
EU Forced Labour Regulation (FLR)
The European Commission has published guidelines on the application of the FLR. The guidelines are non-binding and are intended to support implementation of the FLR which prohibits products made with forced labour from being placed, made available on, or exported from, the EU market. The FLR will apply from 14 December 2027.
From the perspective of competent authorities, the guidelines explain how they should prioritise and conduct investigations, what information they may request from operators and how violations are established and enforced.
From the perspective of economic operators, the guidelines set out a six-step voluntary due diligence framework, modelled on the OECD Due Diligence Guidance, to help companies identify, prevent, mitigate or bring to an end forced labour risks in their operations and supply chains, and clarify how due diligence evidence may assist operators during an investigation.
EU Deforestation Regulation (EUDR)
The European Commission has adopted two measures to support the implementation of the EUDR. These measures are part of the simplification package announced in May 2026. The EUDR will begin to apply from 30 December 2026. The measures include:
A delegated regulation which:
- does not amend the list of commodities covered by the EUDR but amends the list of products derived from those commodities (removing cattle hides, skins and leather, retreaded tyres, soya beans for sowing, conveyer, transmission belts and other articles of vulcanised rubber and aircraft and motor vehicle seats and adding soluble coffee, certain palm oil derivatives, frozen cattle tongues and certain soap products). The new products added will become subject to the EUDR from 30 December 2027 to give businesses time to prepare;
- clarifies that samples and products used for analysis, examination and testing are outside the scope of the EUDR; and
- introduces targeted exemptions for specific categories of products, including waste, used and second-hand products, packing material and products used in the manufacture of medicinal products.
An implementing regulation which sets out the technical rules for the EUDR Information System for submitting due diligence statements and simplified declarations.
The delegated regulation is now subject to scrutiny by the European Parliament and Council of the EU.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
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