EU delays sustainability reporting rules for some companies

The European Council and Parliament reached a provisional agreement to postpone upcoming sustainability reporting requirements by two years for certain sectors and third-country firms.

The deal gives more time to implement the initial Corporate Sustainability Reporting Directive (CSRD) standards adopted last July. Sector-specific European Sustainability Reporting Standards (ESRS) will now be introduced by June 2026.

“This limits reporting burdens while still achieving accountability,” said Belgian Finance Minister Vincent Van Peteghem.

The directive amendment aims to balance corporate transparency needs with competitiveness impacts, prioritizing support for SMEs. New ESRS rules will still apply to third-country multinationals by 2028 as originally planned.

The European Commission proposed the temporary delay to ease adoption pressures, allowing more time to apply the first batch of standards and prepare for the next ones.

In January 2024, the first set of general reporting standards, the ESRS, became applicable to large companies across all economic sectors. Those were expected to be followed by specific reporting standards for sectors like oil and gas, mining, road transport, textiles, as well as agriculture and fishing. But in October 2023, the Commission proposed to postpone them for two years, based on a recommendation from the European Financial Reporting Advisory Group (EFRAG).

The provisional agreement reached with the European Parliament now needs to be endorsed and formally adopted by both institutions.