EFRAG Expands Voluntary Reporting Push as More Large Companies Fall Outside CSRD Scope

EFRAG has launched a call for expressions of interest aimed at companies and stakeholders that want to engage on the practical use of the upcoming EU voluntary sustainability reporting standard for larger businesses outside the scope of the Corporate Sustainability Reporting Directive. The initiative is open to non-SME EU companies that have fewer than 1,000 employees or annual turnover below €450 million, as well as auditors, lenders, investors, business associations, and other users of sustainability information.

The move is significant because it shows how quickly the European reporting landscape is shifting after the Omnibus changes sharply reduced the number of businesses covered by mandatory CSRD reporting. Later this year, the European Commission is expected to issue the new Voluntary Standard as a delegated act, and EFRAG is now trying to understand how that framework could be used in practice by companies that are no longer legally required to report under ESRS.

 

The New Standard Is Becoming More Important After the Scope Reduction

 

The practical relevance of this work has increased because the revised CSRD thresholds have removed a very large share of previously covered companies from mandatory reporting obligations. Under the Omnibus changes, the threshold moved to companies with at least 1,000 employees and more than €450 million in annual revenue, leaving many medium-sized and larger private businesses outside the formal ESRS regime.

That change has created a new reporting gap. Many companies that are no longer required to report still operate in supply chains, financing relationships, and investor environments where sustainability information remains relevant. EFRAG’s outreach suggests it sees a growing need for a structured voluntary framework that can give those businesses a credible reporting route without forcing them into the full ESRS architecture.

 

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EFRAG Is Building on the Existing VSME Foundation

 

The upcoming voluntary standard will be based on the Voluntary Standard for SMEs, or VSME, which EFRAG issued in late 2024 and which the European Commission later endorsed. That matters because it means the next stage of voluntary reporting is not being created from scratch. Instead, EFRAG is trying to adapt an existing reporting foundation to a broader group of companies that sit outside mandatory CSRD scope but may still want to report in a more structured way.

This is an important development because the VSME was originally designed for smaller non-listed businesses. Extending that logic toward larger non-SME companies suggests the EU reporting ecosystem is moving toward a more graduated model, where sustainability reporting options are shaped by size, market relevance, and practical reporting capacity rather than by a simple mandatory-versus-nothing divide. This is an inference based on EFRAG’s stated plan to engage non-SME companies outside ESRS scope using a VS built on the VSME base.

 

The Goal Appears to Be Practical Application, Not Just Standard Design

 

EFRAG has said the engagement and research activities may include webinars, surveys, interviews, and events to gather insight into how sustainability reporting is evolving across Europe and how the future voluntary standard could actually work in practice. That emphasis is important. It suggests the current phase is less about theoretical design and more about market usability.

This matters because one of the main criticisms of the broader EU reporting system has been complexity. For companies outside the mandatory regime, a voluntary framework will only gain traction if it is seen as proportionate, credible, and worth the effort. EFRAG’s decision to consult preparers and users together indicates that it is trying to understand not only what companies can report, but also what investors, lenders, and business partners will actually find useful. This is an inference based on the range of stakeholders invited into the call for interest.

 

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Voluntary Reporting Is Likely to Remain Commercially Relevant

 

Even outside mandatory regulation, sustainability disclosure is unlikely to disappear for these companies. Large customers, financiers, procurement processes, and supply chain data requests continue to create pressure for more structured ESG information. That is one reason voluntary reporting standards are becoming more important: they offer businesses a recognised way to respond without being fully inside the mandatory system.

EFRAG’s latest move suggests it understands that the post-Omnibus landscape will still require reporting discipline, even if the legal obligation no longer applies to many firms. The likely role of the new voluntary standard is therefore not to recreate CSRD for excluded companies, but to provide a lighter, more usable reporting route that still supports market expectations around transparency and comparability. This is an inference grounded in EFRAG’s description of the VS and the changed CSRD scope.

 

A New Layer in Europe’s Reporting Architecture Is Taking Shape

 

The broader significance of the announcement is that Europe’s sustainability reporting system is becoming more layered. Mandatory ESRS remains the core framework for companies still in CSRD scope, but EFRAG is now clearly helping shape a secondary route for companies outside that perimeter. That suggests the future reporting landscape will be less binary than before.

For companies that no longer face mandatory ESRS reporting, the question is shifting from whether they should report at all to what standard they should use when they choose to do so. EFRAG’s outreach effort indicates that this voluntary tier is no longer a side issue. It is becoming a meaningful part of how sustainability reporting may evolve across Europe in the years ahead.