The Legal Affairs Committee of the European Parliament has greenlit a proposal suggesting a two-year delay for the full enactment of the Corporate Sustainable Reporting Directive (CSRD).
This delay, if approved, would extend the adoption of sector-specific sustainability disclosure standards and reporting obligations for non-EU companies until 2026, according to Forbes.
Legal Affairs Committee rapporteur Axel Voss (EPP, DE) explained, “We will delay the deadline for sector specific standards under the Corporate Sustainability Reporting Directive (CSRD) by two years in order to give EFRAG the time to develop quality standards and give companies the time to put them into practice. Companies have been putting up with too much bureaucracy in years of crisis, from Covid to inflation.”
Adopted in November 2022, the CSRD initially imposed reporting obligations on both publicly traded and privately held EU businesses from 2024. The directive outlined the creation of European Sustainability Reporting Standards (ESRS), managed by the European Financial Reporting Advisory Group (EFRAG).
The ESRS, despite their title, encompass broader environmental, social, and governance reporting requirements.
The delay proposal follows the EU’s announcement in late 2023 instructing EFRAG to postpone sector-specific standards and focus on enhancing guidance for the general ESRS.
The legal and regulatory landscape surrounding sustainability reporting has faced challenges, with European Commission President Ursula von der Leyen advocating for a 25% reduction in reporting obligations for SMEs during the State of the Union address in September 2023.
If the proposal is accepted, sector-specific standards for the CSRD will be postponed until 2026, two years beyond the original implementation date.
Additionally, the adoption of general sustainability reporting standards for non-EU companies will also face a delay until 2026. The proposal is set to undergo negotiations with EU governments for final legislation.
This proposed delay signals a nuanced approach to the evolving landscape of sustainable reporting, providing stakeholders more time to navigate and adapt to the regulatory changes.
As the business sector grapples with the impact of ESG and sustainable reporting, further modifications to the CSRD, especially concerning SMEs, are anticipated.
To read the latest breaking RegTech stories as they happen visit https://member.regtechanalyst.com/
Keep up with all the latest FinTech news here.
Copyright © 2024 FinTech Global
Copyright © 2018 RegTech Analyst
