EU CSRD: Commission proposes delay to sector-specific ESRS and ESRS for non-EU companies

On 17 October 2023, the European Commission published its proposal for a Decision of the Parliament and the Council to delay the adoption of certain reporting standards under the Corporate Sustainability Reporting Directive (CSRD). 

The CSRD requires companies that are in scope to disclose information on sustainability matters in accordance with European Sustainability Reporting Standards (ESRS). The Commission adopted first set of ESRS on 31 July (see our previous blog post). It is now subject to the scrutiny of the European Parliament and the Council until 21 October 2023. For more information on the status of the first set of ESRS, see our blog post. These ESRS are sector agnostic, meaning they apply to all companies which are in scope of the CSRD regardless of which sector the company operates in. 

The CSRD also requires the Commission to adopt, by 30 June 2024: (i) sector specific ESRS, which will set out the information specific to the sectors in which a company operates; and (ii) ESRS to be used by certain non-EU companies with business in the EU meeting certain thresholds. The Commission’s proposal suggests delaying by two years the adoption of these ESRS, i.e. to 30 June 2026.

The Commission says that this would allow the companies to focus on the implementation of the first set of ESRS, as well as allow more resources to be dedicated to the development of effective and proportionate sector-specific ESRS and limit the reporting requirements to the minimum necessary. Non-EU companies will only need to report starting from financial year 2028 so the proposed delay still gives them enough time to prepare for reporting under the CSRD.

Once the Decision has been adopted by the Parliament and the Council, it will be published in the Official Journal of the EU and will come into force on the 20^th day following this publication. 

The proposal is one of the 26 proposals to reduce the reporting burden on companies by 25% included in the Commission Work Programme 2024, adopted on 17 October 2023.  

For more information on the ESRS and the CSRD, see our CSRD Demystified materials.