EFRAG Starts Work on Voluntary Reporting for Non-SME Companies

EFRAG’s latest move points to a broader debate about voluntary sustainability reporting in Europe. As the mandatory CSRD perimeter narrows, attention is shifting to what companies outside scope may still need to disclose.

EFRAG has opened a call for expressions of interest on voluntary sustainability reporting by non-SME companies outside the scope of the Corporate Sustainability Reporting Directive (CSRD). It comes as the European Union narrows the mandatory CSRD perimeter, while demand for structured sustainability information from companies outside that scope has not disappeared.

The discussion is now turning to the design of a voluntary reporting framework for companies outside mandatory CSRD reporting.

EFRAG Opens a Preparatory Phase

On 24 March 2026, EFRAG announced that it is seeking applications from companies and other stakeholders across the EU for future research and engagement activities on the application of an upcoming Voluntary Standard (VS) by non-SME companies outside the scope of the CSRD. EFRAG says it will consider EU companies that are not SMEs and have fewer than 1,000 employees or annual turnover below EUR 450 million. The call also covers auditors, business associations, lenders, investors, business partners and other users of sustainability information. Applications are open until 20 April 2026.

EFRAG links the initiative to the Commission’s expected work on a voluntary standard later in 2026. It also says the initiative follows Omnibus I, under which fewer companies would remain in the mandatory CSRD scope, while some companies would still choose to report voluntarily.

The European Commission’s July 2025 Recommendation reinforces that voluntary character. It recommends the use of the VSME by non-listed SMEs and micro-undertakings that wish to disclose sustainability information, and treats self-declarations as proportionate, meaning there is no requirement for assurance in that framework. It also recommends that large companies and financial institutions limit requests to SMEs, as far as possible, to information aligned with the VSME.

Who May Be Affected, and When

The regulatory context shifted in February 2025, when the European Commission put forward the Omnibus I simplification package. It proposed narrowing mandatory CSRD reporting to companies with more than 1,000 employees. On 24 February 2026, the Council gave its final green light to the legislative act.

Alongside that shift, the Commission has proposed a voluntary reporting standard, by delegated act, for companies with up to 1,000 employees, based on the VSME endorsed in July 2025. The future delegated act may still differ from the Commission’s July 2025 Recommendation on the VSME, and its adoption depends on the outcome of the Omnibus simplification process.

This matters beyond SMEs because a narrower mandatory CSRD perimeter does not remove demand for sustainability information. Companies outside mandatory ESRS reporting may still face requests from lenders, investors and business partners. The proposed future standard is also linked to the value-chain cap, which would define the upper limit of what in-scope companies may request from smaller companies in their value chains.

Practical Implications

The practical implications are already taking shape. Even outside mandatory CSRD reporting, companies may still face sustainability information requests from lenders, investors and business partners. That raises questions about ownership, validation and audience: who leads the disclosure process, how information is reviewed internally and which users matter most.

Voluntary reporting still depends on disclosure scope, evidence support and internal review. For companies considering it, the issue is not only whether to report, but whether existing data and internal processes can support disclosures that external users will find usable.

What Comes Next

EFRAG’s call is a procedural step within a wider shift in EU sustainability reporting for companies outside the mandatory CSRD scope. The key points are whether a future voluntary standard arrives in 2026, how closely it follows the current VSME model, and how the value-chain cap is framed. Any future delegated act is expected to build on the current Recommendation, but its final content has not yet been set out.