May 29, 2025 •ESGeo
With the approval of the Omnibus Delegated Act, the European Union has introduced a significant revision to the implementation path of the Corporate Sustainability Reporting Directive (CSRD), aiming to make ESG reporting more accessible, proportionate, and focused on data quality. This initiative seeks to simplify obligations for companies, particularly SMEs and non-listed entities, without compromising transparency and accountability. The Omnibus provides a gradual extension for the application of the European Sustainability Reporting Standards (ESRS) and introduces relief measures for all obligated entities, especially concerning qualitative and less material data points, to prevent sustainability reporting from becoming a technical exercise devoid of impact.
In this context, the Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME), developed by EFRAG, becomes a strategic tool for micro and small enterprises, enabling them to communicate their ESG progress through a simplified approach that aligns with market needs and the requirements of more structured supply chains.
The VSME also serves as a reference point for large companies and financial operators who, in compliance with the Sustainable Finance Disclosure Regulation (SFDR), must integrate ESG criteria into their decision-making processes and require clear and verifiable data from their suppliers or clients. The combined effect of these regulatory and operational interventions is twofold: on one hand, it reduces the information burden for less structured companies; on the other, it acknowledges the efforts of those who have already embarked on solid reporting paths, double materiality assessments, ESG risk mapping, and the definition of strategic KPIs.
In a cultural and political context marked by growing skepticism towards sustainability policies - often criticized for being overly bureaucratic or ideological - the new European approach aims to restore concreteness and trust. Paradoxically, the increase in criticism towards "green excesses" is prompting many companies to strengthen their commitment in a more authentic manner, focusing on real impacts and the effectiveness of their actions.
The European Central Bank has recently expressed, through a formal opinion, concerns that excessive simplification could undermine the financial system's ability to accurately assess environmental and climate risks, while also recognizing the need to ensure ESG reporting is understandable, comparable, and truly useful. This discussion also encompasses the role of advisors and auditors who, while pursuing transparency, have in some cases contributed to amplifying the complexity of reporting by promoting a proliferation of less material indicators.
The Omnibus instead calls for a return to the core of ESG reporting: providing relevant, readable information connected to the concrete impacts of business activities. For companies, this phase represents a real window of opportunity. Those who seize it can differentiate themselves in the market, strengthen their reputation, improve access to ESG-linked financing, and consolidate relationships with stakeholders and strategic partners. In this sense, the VSME can become a catalyst for transparency and coherence in supply chains, promoting a balance between simplicity and completeness. Companies that adopt pragmatic approaches, focused on materiality and supported by competent partners, will be the first to benefit from a more mature, effective, and business-integrated sustainability. In summary, sustainability - freed from formal excesses - returns to what truly matters: a lever to create value, resilience, and trust.