Commission presents voluntary sustainability reporting standard for SMEs

30 July 2025, the European Commission adopted a recommendation to introduce a voluntary sustainability reporting standard for small and medium-sized enterprises (SMEs) in order to reduce administrative burdens and facilitate the easier sharing of sustainability information among market participants. The proposed voluntary standard aims to support those SMEs that are not subject to the Corporate Sustainability Reporting Directive (CSRD) but still face sustainability data requests from large companies or financial institutions.

The standard recommended by the Commission was developed by the technical expert group responsible for sustainability reporting (EFRAG). The expert group encourages large companies and financial institutions to request data from SMEs based on this standard wherever possible. For smaller businesses, voluntary reporting can improve access to sustainable finance and help monitor and strengthen their own sustainability performance.

In February 2025, the European Commission adopted a simplification package proposing that the CSRD's mandatory reporting requirements should apply only to companies with more than 1,000 employees. For smaller companies, a voluntary reporting system would come into effect, based on the current recommendation. On 31 July 2025, EFRAG published the revised and simplified Exposure Drafts of the European Sustainability Reporting Standards (ESRS), launching a consultation to gather feedback from stakeholders across the EU corporate reporting ecosystem.