On 30 July 2025, the European Commission (Commission) adopted a recommendation on voluntary sustainability reporting for small and medium-sized companies (SMEs).

On 26 February 2025, the Commission adopted the Omnibus I simplification package which proposed to limit mandatory sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD) to large companies with more than 1,000 employees. For companies with up to 1,000 employees, the Commission proposed a voluntary reporting standard which will be adopted by the Commission, based on the recommendation which has now been adopted. This future voluntary reporting standard will also act as a “value-chain cap” to protect SMEs and other companies not subject to mandatory reporting under the CSRD from excessive information requests from their value chain partners.

The Commission has also published Q&As on the recommendation.