The European Union (EU) Legal Affairs Committee has approved a proposal to delay — by two years, until June 2026 — the adoption of sector-specific sustainability disclosures and sustainability reporting standards for companies outside the Bloc.
The proposal to delay these two CSRD aspects, initiated by the EU Commission in October, was approved with 21 votes in favor and 2 votes against.
Both of these are components of the Corporate Sustainable Reporting Directive (CSRD), the EU’s new legislation requiring all large companies to regularly report on their environmental and social impact. The CSRD regulation entered into force on January 5, 2023.
The approved proposal delays the implementation of ESG reporting standards for the following eight sectors: oil and gas, mining, road transport, food, cars, agriculture, energy production, and textiles.
The decision is part of the 2024 Commission Work Programme that aims to “simplify rules for citizens and businesses across the European Union,” as the EU Commission explains, and that is “in line with [the EU’s] strategy to boost the EU’s long-term competitiveness and to provide relief for SMEs.”
“With the 2024 Work Programme, the Commission is putting forward 26 additional proposals to reduce administrative burden without lowering social, safety, consumer protection, environmental or economic standards,” writes the Commission.
The postponement of the deadline for adopting sector-specific European Sustainability Reporting Standards (ESRS) is marked as a key action here.
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The ESRS, which entered into force at the end of 2023 and started being applied at the start of this year, delineates the guidelines and prerequisites for companies to report sustainability-related impacts, opportunities, and risks under the CSRD.
“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,” German member of the centre-right EPP party Axel Voss said. “Companies have been putting up with too much bureaucracy in years of crisis, from Covid to inflation.”
Following the committee’s vote, the proposal will proceed to the Parliament plenary for approval, forming its negotiating stance with the EU Council.
Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com — In the Featured Photo: European Parliament building in Brussels, Belgium. Featured Photo Credit: Wikimedia Commons.