The European Commission has put forward a significant reform package that would ease and postpone parts of the European Union’s Corporate Sustainability Reporting Directive (CSRD) — a key regulation used to standardise environmental, social and governance (ESG) disclosures for companies operating in Europe. The proposals aim to simplify the regime, reduce administrative burdens and delay mandatory reporting timelines for affected businesses.
Under the plan, the Commission would exempt around 80 % of companies originally in the CSRD’s scope by raising reporting thresholds and narrowing the number of firms required to comply. This change is intended to refocus sustainability reporting on the largest companies with the biggest environmental and social impacts, while reducing reporting burdens on smaller firms and medium‑sized enterprises (SMEs).
A headline element of the package is the proposal to delay the CSRD compliance timeline by two years, meaning the next wave of companies now subject to CSRD would begin reporting in 2028 instead of 2026. The adjustment reflects industry concerns about readiness and aims to give firms more time to build up data systems and internal controls needed to meet the directive’s requirements.
The reform is part of a wider “simplification omnibus” push by the Commission that also proposes reducing the number of data points companies must disclose and streamlining related rules under the Corporate Sustainability Due Diligence Directive (CSDDD). The latter would see its first compliance phase also delayed to 2028 under the new timeline.
Supporters of the move argue these changes will boost competitiveness, cut red tape and ease regulatory complexity while retaining the core ESG goals of improved transparency and accountability. Critics, however, including some investor groups and environmental advocates, warn that delaying and narrowing sustainability reporting could reduce the availability of reliable ESG data and weaken corporate accountability in supply chains.
At the next stage, the European Parliament and the Council must review and adopt the proposals before they can be finalised and written into EU law.
#BreakingNews #SupplyChainNews #SustainabilityReporting #CSRD #RegulatoryUpdate
