Green Forum • 2 May, 2024 at 9:00 AM
The European Council has formally endorsed a directive aimed at extending reporting deadlines for specific industries and companies outside the EU. This directive, which amends the Corporate Sustainability Reporting Directive (CSRD), grants affected companies additional time to adopt European Sustainability Reporting Standards (ESRS).
The approved directive postpones the implementation of sector-specific sustainability reporting standards for EU firms and general sustainability reporting standards for non-EU entities until June 30, 2026. This extension allows companies to concentrate on integrating the initial set of ESRS and reduces reporting obligations to a necessary minimum. Moreover, it provides additional time for the development of sector-specific sustainability standards and standards applicable to non-EU firms.
Moving forward, following the Council's endorsement of the European Parliament's stance, the legislative act has been formalized. Upon endorsement by the Presidents of the European Parliament and the Council, the directive will be published in the Official Journal of the European Union, becoming legally binding twenty days after publication.
This directive responds to concerns raised by the Commission regarding reporting burdens on companies, particularly small and medium-sized enterprises (SMEs). In line with the Commission's communication titled 'Long-term competitiveness of the EU: looking beyond 2030', efforts are made to alleviate reporting obligations by 25% without compromising policy objectives.
Under existing EU legislation, listed companies are obligated to disclose information about social and environmental issues. The first comprehensive standards covering all sustainability topics were adopted by the Commission on July 31, 2023. The directive endorsed today introduces a two-year delay for the publication of sector-specific standards and standards applicable to non-EU entities. This delay aims to afford companies ample time to implement the initial set of standards and prepare for subsequent ones. The directive forms part of the initial suite of measures designed to streamline reporting requirements and aligns with the SME Relief Package.