This will allow more time to develop appropriate standards for individual sectors and non-EU companies

At the end of April 2024, the European Council postponed for two years the introduction of new sectoral reporting standards under the Corporate Sustainability Reporting Directive (CSRD) for certain sectors and third-country companies.

The directive, which allows for a two-year delay, was published in the EU’s Official Journal on May 8 and will enter into force on May 28.

This step postponed the adoption of sectoral sustainability reporting standards for EU companies in the relevant sectors and general sustainability reporting standards for non-EU companies until June 30, 2026.

«This will allow companies to focus on the implementation of the first set of ESRS and limit the reporting requirements to a necessary minimum. It will also allow more time to develop these sector specific sustainability standards and standards for non-EU companies,» the European Council said in a statement.

The decision is in line with the concerns expressed in the European Commission’s October 2023 report on the long-term competitiveness of the bloc. The reporting burden was identified as a key issue for businesses.

The CSRD was adopted in November 2022. It applies to approximately 50 thousand companies registered in the EU markets or operating in the bloc’s countries. The disclosure requirements are set out in the European Sustainability Reporting Standards (ESRS).

Initially, the standards will be applied only to public and large private companies, but will be expanded to cover small and medium-sized businesses. In addition, the ESRS will apply to companies outside the bloc that meet certain requirements based on revenue and presence in the EU.

The first set of companies that must comply with the CSRD requirements starting in 2024 must include in their annual reports the sustainability indicators set out in the directive, ESG Dive writes. The second round, which is subject to the delay, covers the oil and gas, mining, road transport, food, automotive, agricultural, energy and textile industries.

As GMK Center reported earlier, the International Chamber of Commerce (ICC) has identified a number of problems faced by companies during the first reporting period of the CBAM transition phase and invited the EU to engage in a dialogue on these issues.