European Fund and Asset Management Association urges EU policymakers to create an ESRS-based voluntary sustainability reporting standard for small and mid-caps outside CSRD

The European Fund and Asset Management Association, alongside Eurosif and the Principles for Responsible Investment, published a joint call for a credible and proportionate voluntary sustainability reporting standard for companies with more than 250 employees that are expected to fall outside the Corporate Sustainability Reporting Directive (CSRD) scope under the Omnibus Simplification package negotiations. The groups argue that a minimum voluntary standard is needed to preserve access to decision-useful sustainability information for financial institutions and investors. They warn that the European Commission’s current proposal risks excluding many companies that were already reporting under the Non-Financial Reporting Directive (NFRD) and CSRD, creating ESG data gaps and market fragmentation, and that using the Voluntary Standard for SMEs (VSME) as the basis for non-SME reporting would be insufficient in granularity and reliability for larger companies. As an alternative, they recommend grounding a voluntary regime in the revised European Sustainability Reporting Standards (ESRS), with proportionate and scalable requirements intended to improve comparability and reliability of disclosures, support a transition toward mandatory reporting, and reduce ad-hoc investor data requests.