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The European Parliament and the Council of Europe this week agreed to postpone the entry into effect of sustainability reporting requirements by two years for certain industries and non-EU companies.
This will give companies more time to prepare for the EU’s sustainability reporting rules, the two institutions said in a statement.
“Boosting European competitiveness is a core pillar of the Belgian Presidency, and one way to achieve this objective is to reduce the administrative burden on companies,” Belgium’s Deputy Prime Minister and Minister of Finance said.
“Today’s agreement limits reporting requirements to the minimum and gives companies time to implement the ESRS and prepare for the sectorial European Sustainability Reporting Standards.”
The EU’s Corporate Sustainability Reporting Directive stipulates that businesses that are listed must disclose “risks and opportunities arising from social and environmental issues to help investors, civil society, consumers and other stakeholders to evaluate the green and social sustainability of their activities.”
Per its architects, the purpose of the standards is to boost investor confidence in sustainable products and services.
Last year, Brussels approved the broadest reporting standards in that area and then started working on sector-specific reporting requirements, business-size specific requirements—for small and medium companies—and requirements for non-EU companies that generate turnover of over 150 million euro in the block.
Originally, the new standards were supposed to enter into effect this June but this has now been delayed to June 2026 to make it easier for companies to comply. The decision follows a recommendation along these lines made by the European Commission last month. The recommendation was embraced by the European Parliament as well.
In addition to the delay for CSRD’s entry into effect, the European Union also reached an agreement this week on how to regulate ESG ratings providers to make sure these ratings reflect actual performance.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.