EFRAG Seeks Companies to Shape New Voluntary Sustainability Reporting Standard

The European Financial Reporting Advisory Group launched a call for expressions of interest from large companies and stakeholders outside the scope of the Corporate Sustainability Reporting Directive to engage on the development of a new voluntary sustainability reporting standard. The call follows the EU Omnibus I initiative, which reduced the CSRD threshold from 250 to 1,000 employees, removing an estimated 90% of previously covered companies.

EFRAG is inviting applications from EU companies that are not SMEs but have fewer than 1,000 employees or annual revenue below EUR 450 million, as well as auditors, business associations, lenders, investors, and other users of sustainability information. The engagement will include webinars, surveys, events, and interviews to understand how the voluntary standard might be applied in practice and how sustainability reporting is evolving across Europe. The new voluntary standard will be based on the VSME standard released by EFRAG in 2024 for companies with fewer than 250 employees.

A recent survey found that most companies removed from CSRD scope under the Omnibus changes plan to continue sustainability reporting voluntarily, indicating demand for a standardized framework. The shift from mandatory to voluntary frameworks for mid-sized companies reflects a broader recalibration of EU sustainability regulation aimed at reducing administrative burden while preserving reporting continuity. The new standard is expected to be adopted by the European Commission later in 2025 and will sit alongside the revised, simplified ESRS that apply to larger companies.

For companies with global operations and supply chain relationships with CSRD-covered entities, voluntary adoption of a recognized EU standard may be practically necessary regardless of regulatory status, as large customers and lenders increasingly request standardized ESG data. EFRAG's engagement process aims to ensure the voluntary standard is practical and fit for purpose before it is formally adopted. Stakeholders can apply to participate in the research process, with EFRAG committing to continuous dialogue with non-SME companies outside mandatory ESRS scope.

Key figure — 90% of previously CSRD-covered companies removed from mandatory scope under Omnibus I