ICAS responds to European Commission’s consultation on sustainability reporting standard for voluntary use

We've submitted our response to the European Commission (EC)’s public feedback exercise on a proposed sustainability reporting standard for voluntary use, emphasising the need for a proportionate and practical approach.

Background 

On 6 May 2026, the EC launched a “Have Your Say” on a draft voluntary sustainability reporting standard that is intended for companies outside the scope of the Corporate Sustainability Reporting Directive (CSRD) and so not subject to mandatory sustainability reporting requirements. 

The initiative builds on the Omnibus I simplification programme, which aims to reduce the reporting burden placed on companies while maintaining the quality of sustainability disclosures. In addition, the voluntary standard is meant to offer protection to value chain undertakings: the so-called “value chain cap” means CSRD in scope companies cannot require value chain partners with 1,000 employees or fewer to provide information beyond what is set out in the voluntary standard. 

This new standard is different from but based on EFRAG’s (European Financial Reporting Advisory Group) voluntary SME standard which the EC endorsed through a recommendation in 2025, and which is already in use.  

ICAS response 

We support the development of a voluntary framework and highlight several priorities to ensure it’s effective in practice: 

• Proportionality: The standard should reflect the capabilities and resources of smaller companies.   
• Decision‑useful disclosures: Sustainability reporting should focus on the clear presentation of relevant, meaningful information rather than quantity of data points, that tell a consistent narrative with financial disclosures. We fully support the standard setting out requirements that allow undertakings to report on impacts as well as matters that affect its financials. 
• Alignment: Consistency with European Sustainability Reporting Standards’ (ESRS) concepts should be maintained where appropriate to support comparability and future transition to expanded reporting.  
• Practical guidance: Clear supporting materials will be essential to ensure consistent application. 

We’ll continue to advocate for high-quality, decision-useful disclosures while recognising the realities faced by smaller companies. 

Next steps for the voluntary sustainability reporting standard 

In July 2026, the EC adopted the proposed voluntary sustainability reporting standard.  This voluntary standard (together with the revised ESRS) will be submitted to the European Parliament and the Council of the EU for a two-month scrutiny period. Once formally adopted by the EU institutions, companies subject to the CSRD will be obliged to apply the updated reporting standards from financial year 2027. 

Read our full response