Revised ESRS and Voluntary Sustainability Reporting Standards Become Final: What Changes for Estonian Companies from 2027

This material covers EU sustainability reporting rules as they stand in September 2026 and their practical effect on Estonian companies. It is prepared with input from eBusiness Solutions OÜ, a licensed Estonian corporate service provider (Licence No. FIU000421) and an official member of the e-Residency Marketplace, which handles company formation, legal address, accounting and the Annual report for Estonian companies for clients operating across the EU.

The two delegated acts that will define EU sustainability reporting for the next several years are now final.

On 3 July 2026 the European Commission adopted the revised European Sustainability Reporting Standards (ESRS) and a separate Voluntary Sustainability Reporting Standard for companies outside the scope of the Corporate Sustainability Reporting Directive (CSRD). Both were then subject to a two-month scrutiny period by the European Parliament and the Council. That period has now expired without objection, which means the texts are settled and are expected to be published in the Official Journal.

The practical dates are simple: the standards apply to financial years beginning on or after 1 January 2027, with the first sustainability reports under the revised regime due in 2028.

For most Estonian OÜ owners the headline is unambiguously good news. But the second delegated act — the voluntary one — is the part that will actually reach small Estonian companies, and it deserves closer reading than its name suggests.

What was cut

The revised ESRS were adopted as part of the EU’s simplification agenda. The reduction is substantial. According to the European Commission, the revised standards cut mandatory datapoints by more than 60% and total datapoints by more than 70%, while preserving core concepts including double materiality. The Commission expects reporting costs to fall by more than 30% per company.

Sector-specific standards, which had been planned under the original CSRD architecture, have been removed. Assurance requirements were adjusted, and the earlier trajectory towards reasonable assurance was dropped.

Who is still in scope after Omnibus I

The standards sit on top of a scope that was already narrowed dramatically earlier this year.

Directive (EU) 2026/470 — the Omnibus I Directive — was published in the Official Journal on 26 February 2026 and entered into force on 18 March 2026. It raised the CSRD thresholds to:

EU companies: more than 1,000 employees and net annual turnover above €450 million;
Non-EU parent groups: more than €450 million net turnover generated in the EU, plus at least one EU subsidiary or branch with turnover above €200 million.

The previous thresholds were €50 million turnover, €25 million balance sheet total and 250 employees. Estimates circulated during the negotiations suggested the change removes roughly 80% of previously in-scope companies, leaving somewhere in the region of 5,000 reporting entities across the EU.

The parallel due diligence regime (CSDDD/CS3D) was narrowed even further — to EU companies with more than 5,000 employees and €1.5 billion turnover.

What this means for Estonia in plain terms: the number of Estonian companies obliged to file a sustainability report under the Accounting Act is now very small. Estonia transposed the CSRD through amendments to the Accounting Act (raamatupidamise seadus) adopted by the Riigikogu in December 2024; further national amendments are required to reflect Omnibus I, and Estonian companies near the old thresholds should follow that legislative process rather than assume the EU text applies directly.

Companies not captured by the new thresholds are not required to report for financial years starting on or after 1 January 2027.

The voluntary standard is the part SMEs should read

Alongside the revised ESRS, the Commission adopted a Voluntary Sustainability Reporting Standard (widely referred to as the VS, built on EFRAG’s earlier VSME work) for companies below the CSRD threshold.

It is modular: a Basic Module for companies starting out and a Comprehensive Module for those that want to disclose more. There is no mandatory double materiality assessment and no required external assurance.

The significant part is not the reporting option. It is the value chain cap.

Under the revised framework, a company reporting under the CSRD may not require sustainability information exceeding the limits set by the voluntary standard from undertakings in its value chain that do not exceed an average of 1,000 employees. These smaller entities — “protected undertakings” — may decline requests that go beyond it.

That flips the practical dynamic. Before Omnibus I, the main SME complaint about the CSRD was never the directive itself; it was the proliferation of bespoke ESG questionnaires arriving from large customers, banks and procurement departments, each in a different format. The voluntary standard now functions as a legal ceiling on those requests — and, in practice, as the common language in which they will be made.

An Estonian OÜ with fifteen people that supplies software to a German industrial group is not a CSRD reporter and never will be at these thresholds. It will still receive the questionnaire. The difference from 2027 is that it can answer once, in a standard format, and point to the cap when asked for more.

“Our clients are almost entirely below any CSRD threshold, so the reporting obligation itself is not their problem,” says Jana Kamoza, CEO and Legal Advisor at eBusiness Solutions OÜ. “What they encounter is a procurement form from a large customer, or an ESG section in a bank’s onboarding questionnaire. The value chain cap gives them a defined answer instead of an open-ended one. That is the change worth preparing for.”

What is still moving

Three workstreams remain open, and each has a date attached.

EFRAG datapoint list. EFRAG has published an updated list of ESRS datapoints reflecting the final adopted standards, following the methodology of its Implementation Guidance 3. Stakeholders were invited to flag any fatal flaws by 23 October 2026, with a final version expected before the end of 2026.

XBRL taxonomy. EFRAG has announced that a draft XBRL taxonomy for the revised ESRS — the machine-readable layer — will go out for consultation shortly. Estonian companies will recognise the logic: annual reports are already filed with the Commercial Register in structured XBRL format rather than as PDF or Word documents. Sustainability reporting is heading the same way.

ESRS-40a for non-EU groups. On 23 July 2026, EFRAG launched a public consultation on draft standards for certain non-EU undertakings under Article 40a of the Accounting Directive. These would require EU subsidiaries and branches of in-scope third-country groups to publish sustainability information at ultimate parent level. The consultation runs to 31 October 2026; EFRAG expects to submit final technical advice in January 2027, with adoption anticipated during 2027 and first reports in 2029 for financial years starting on or after 1 January 2028.

That last item matters for a specific Estonian population: subsidiaries and branches of large non-EU groups. An Estonian entity that is small in itself can still be pulled into a group-level obligation.

The obligation that has not changed

It is worth stating clearly, because simplification headlines create the wrong impression: none of this reduces the ordinary Estonian annual reporting obligation.

Every company registered in Estonia — OÜ, AS or MTÜ, active or dormant, locally or foreign-owned — must file an annual report with the Commercial Register within six months of the end of the financial year. For a calendar financial year, that means 30 June. Newly registered companies may have a first financial year of up to 18 months if the articles of association provide for it, which shifts the first deadline accordingly.

The report is filed electronically in XBRL format, in Estonian and in euros. It comprises the balance sheet, income statement and notes, plus a cash flow statement, statement of changes in equity, management report, profit distribution proposal or auditor’s report depending on company category and statutory triggers. Micro and small enterprises applying Estonian GAAP are generally entitled to a simplified report — micro being up to €900,000 revenue, €450,000 total assets and 10 employees; small being up to €10 million, €5 million and 50 employees, on a two-of-three basis.

Audit or review obligations depend on separate thresholds under the Authorised Public Accountants Act, starting at €2 million revenue / €1 million assets / 24 employees for a review.

Missing the deadline is not a formality. The Commercial Register may issue warnings, impose fines on board members and, in cases of prolonged non-compliance, initiate compulsory deletion of the company. Overdue filings are publicly visible in the register — which is precisely where banks, payment institutions and counterparties look during KYC and AML checks.

What Estonian companies should do before 1 January 2027

If you are near the CSRD thresholds (1,000 employees / €450 million), monitor the Estonian transposition of Omnibus I into the Accounting Act, and begin implementation planning against EFRAG’s updated datapoint list rather than the original 2023 ESRS.

If you are a supplier to large EU customers — which describes a large share of Estonian OÜs, including e-resident companies in software, consultancy and e-commerce — get the Basic Module data organised before the questionnaires arrive. The inputs are mostly information you already hold: electricity consumption, fuel, waste, headcount, training. Build one disclosure pack and reuse it.

If you are a subsidiary or branch of a non-EU group, watch ESRS-40a. Your own size does not determine the outcome.

Everyone else: the sustainability regime has moved further away, not closer. The annual report has not. File on time.

About eBusiness Solutions OÜ

eBusiness Solutions OÜ is a licensed Estonian corporate service provider (registry code 16618432, VAT EE102672239, licence FIU000421) and an official member of the e-Residency Marketplace. The company provides company formation in Estonia, legal address and contact person services, virtual office packages, accounting, VAT registration, annual report preparation and filing, and licensing support.

Annual report services start from €250 for a dormant company, €450 for small non-VAT-registered companies, and €750 for active businesses (VAT/OSS-registered, with employees, or operating in e-commerce, fintech and crypto). All prices exclude VAT. The process is fully remote — documents can be signed with e-Residency, Estonian ID, Smart-ID or Mobile-ID, or through a notarised power of attorney.

Address: Tornimäe tn 7-169, Tallinn, Estonia, 10145 Web: legaladdressinestonia.com

This article is for information only and does not constitute legal or accounting advice. Specific advice should be sought for your circumstances.

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