EU Council Approves Corporate Sustainability Reporting Delay
Overview
The EU Council has approved a delay in corporate sustainability reporting requirements until 2028. This decision is part of a broader effort to reduce the regulatory burden on businesses while maintaining the EU's commitment to sustainability.
In recent years, the European Union has implemented several regulations under the European Green Deal to promote sustainability. These include the Taxonomy for Sustainable Activities, the Corporate Sustainability Reporting Directive (CSRD), and the Corporate Sustainability Due Diligence Directive (CSDDD). These directives aimed to classify green activities, mandate sustainability reporting, and enforce due diligence in corporate value chains.
The Push for Reform
Despite the positive reception from climate activists, the business community expressed concerns about the regulatory burden. The 2024 European Parliament elections saw a shift to the right, with environmentally focused parties losing seats. This political change prompted a call for reforms to ease the pressure on businesses.
The Omnibus Simplification Package
In response, the European Commission proposed the Omnibus Simplification Package in February 2025. This package includes two key directives: delaying the implementation of the CSRD and CSDDD until 2028 and reducing the number of businesses required to file sustainability reports. Only large companies with over 1,000 employees and €450 million in annual net turnover will be subject to these requirements.
Council Approval and Next Steps
On March 26, 2025, the Council of the EU approved the delay. The focus now shifts to the European Parliament, which will vote on the proposal and potential amendments in early April. This delay aims to provide legislative bodies with more time to debate the changes while alleviating the immediate burden on businesses.
Implications for Businesses
The delay and reduced reporting requirements are expected to relieve businesses, allowing them to focus on economic recovery. However, it also raises questions about the EU's long-term commitment to sustainability and the potential impact on climate goals.
The EU Council's approval of the corporate sustainability reporting delay marks a significant shift in the EU's approach to balancing regulatory demands with economic realities. As the European Parliament prepares to vote, the outcome will shape the future of sustainability reporting in the EU.
