Aiming for Competitiveness: EU Delays Sustainability Rules
The European Council has approved a two-year delay in adopting sector-specific sustainability reporting standards and requirements for non-EU companies under the CSRD, aiming to reduce reporting burdens and enhance global competitiveness.In a move to simplify regulatory requirements and bolster competitiveness, the European Council has postponed the adoption of certain sustainability reporting standards by two years, allowing companies more time to implement existing frameworks effectively.
The European Council has approved a directive delaying the adoption of sector-specific sustainability reporting standards and reporting requirements for non-EU companies under the Corporate Sustainability Reporting Directive (CSRD). This decision postpones the deadline for these standards by two years to June 2026, allowing companies additional time to implement the initial set of European Sustainability Reporting Standards (ESRS) adopted in July 2023. The delay aims to reduce the reporting burden on companies and provide more time for the development of comprehensive sector-specific and non-EU company reporting standards. Despite the postponement, the application date for non-EU companies' reporting obligations remains set for the financial year 2028, as initially outlined in the CSRD.
This move is part of the European Commission's broader initiative to enhance the EU's global competitiveness by simplifying regulatory requirements. The "Simplification Omnibus" proposal includes easing environmental and corporate sustainability rules, such as reducing the number of companies required to comply with sustainability reporting and delaying initial reporting deadlines. These changes aim to alleviate bureaucratic burdens and allow companies to focus on implementing existing standards effectively.
While the delay provides companies with more time to prepare, some critics argue that postponing these standards may undermine accountability and hinder progress in sustainability efforts. Balancing the reduction of administrative burdens with the need to maintain robust sustainability reporting remains a key challenge for EU policymakers.
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