The European Parliament on Thursday (3 April) voted to delay the rollout of new sustainability reporting and due diligence laws as part of wider “simplification” efforts to boost the EU’s competitiveness.
The move, which has already been approved by the EU Council, will extend the deadline for EU countries to enact the Corporate Sustainability Reporting Directive (CSRD) into national law by a further year – until July 2027 – and will also extend the compliance deadline for companies currently under the directive’s scope.
EU companies with more than 5,000 employees and net turnover higher than €1.5 billion, as well as non-EU companies with a turnover above this threshold in the EU, will now have until 2028 to comply, while small and medium-sized companies will be required to submit sustainability reporting in 2029.
A one-year extension has also been granted for the transposition and application of the Corporate Sustainability Due Diligence Directive (CSDDD).
Members of the European Parliament overwhelmingly supported change, with 531 voting to support the delayed rollout, compared to 69 against and 17 abstentions.
The delayed implementation of both the CSRD and CSDDD was among proposals laid out in the EU’s Omnibus Package, announced in February, which also suggested drastically reducing the scope of CSRD and removing sector-specific emissions reporting standards.
Work regarding changes to the scope and content of the CSRD will now begin in the Parliament’s Legal Affairs Committee “under its urgent procedure”, the EU Parliament said in a statement.
Changes to the reporting directive have drawn criticism from the business events industry, with many concerned the simplification push will be interpreted by businesses “as a license to slow down their efforts to track and reduce emissions”.