Yesterday (24/1) the European Parliament’s Legal Affairs Committee approved a 2-year delay for sector-specific ESRS standards, until June 2026, including sustainability reporting from third-country companies.
This delay should enable the companies to focus on the implementation of the first set of general ESRS adopted on 31 July 2023, mandatory under CSRD.
It will also rationalise reporting obligations for companies, as well as provide the European Financial Reporting Advisory Group (EFRAG) with more time to develop the new standards.
However, MEPs believe that sector-specific sustainability standards enable comparisons between companies and are therefore valuable source of information for investors.
That is why although they agree with the delay, they also suggest that the Commission publishes eight sector-specific reporting standards (specific to oil, energy and mining industries) as soon as they are ready before the deadline.
“We will delay the deadline for sector specific standards under the Corporate Sustainability Reporting Directive (CSRD) by two years in order to give EFRAG the time to develop quality standards and give companies the time to put them into practice. Companies have been putting up with too much bureaucracy in years of crisis, from Covid to inflation.” (Rapporteur Axel Voss)
The proposal was made by the EU Commission in October, as part of its 2024 Commission Work Programme, which included reducing reporting burdens for companies as one of its priorities, and highlighted the postponement of the deadline for the adoption of sector-specific ESRS as one of the key actions listed.
Sector-specific European Sustainability Reporting Standards (ESRS) should clarify what exactly and to what detail should companies in particular sectors disclose about their impact on people and the planet, including on decarbonisation, biodiversity or human rights since methods and impacts differ depending on the sector.
Reporting obligations for non-EU companies with turnover above 150 million euro and their branches in the EU with turnover above 40 million euro will start to apply in 2028, based on the upcoming standards.
Source : Press release
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