The European Commission has revealed a proposal to delay key aspects of its Corporate Sustainable Reporting Directive (CSRD).
In an October 17 decision, the Commission said that in order to reduce the reporting burden for financial market participants, it has proposed a two-year delay of the date of adoption of the sector-specific European Sustainability Reporting Standards (ESRS), currently required in 2024.
This, it explained, also responds to a demand from the corporate sector.
The move is relevant for companies in the scope of the CSRD, including listed SMEs, required to carry out sustainability reporting. “This will allow these companies to focus on the implementation of the first set of ESRS adopted on 31 July 2023, ensure that EFRAG has time to develop sector specific ESRS that are efficient, and limit the reporting requirements to the minimum necessary,” the Commission stated.
It was also stated that the adoption deadline for the ESRS to be used by certain non-EU companies with business in the EU, should also be extended by two years. It had been targeted for 30 June 2024.
“This will allow more resources to be dedicated to the development of effective and proportionate sector specific ESRS, while still giving enough time for these non-EU companies to prepare ahead of financial year 2028,” the decision reads.
With just a few months until the 2024 European elections, Commission President Ursula von der Leyen has pledged to cut reporting requirements by 25% to help encourage the EU’s competitiveness against foreign markets.