The times for the application of the CSRD directive or “Corporate Sustainability Reporting Directive”, which places new corporate reporting obligations on sustainability, which came into force at the beginning of the year. The commission has in fact proposed a extension of a couple of years for some specific sectors, loosening the links compared to the rigidity shown initially. And the proposal was approved last week by the Legal Affairs Committee of the European Parliament.
“We will delay the deadline for sector-specific standards under the Corporate Sustainability Reporting Directive (CSRD) by two years to give EFRAG time to develop quality standards and give companies time to put them into practice,” he said. declared the rapporteur Axel Voss.
What does the directive in question prescribe
The Directive in question, which dates back to 2022, the reporting landscape radically changes corporate, replacing the previous NFRD or “Non Financial Reporting Directive – NFRD”. The new legislation introduces new standards of Sustainability Reporting by Sector (ESRS) and significantly extends the scope, based on size of the company, in many cases also including SMEs with voluntary reporting.
It is estimated that the previous regulation involved only 11 thousand companies in Europe and that the current one does includes at least 49 thousand companies of which 7 thousand in Italy. Small and medium-sized listed companies will be obliged starting from 2027, but there is also the possibility of extending reporting for another two years9 upon appropriate justification.
What did the Commission propose?
European parliamentarians have approved a Commission proposal which two-year extension, until early 2026the application of the provisions of the directive regarding sustainability reporting for some specific sectors with hard-to-abate emissions – oil, energy, mining – and for non-EU companies.
More specifically, the sectors authorized to extend the deadlines, to adapt to the new sector reporting standards (ESRS), are those of oil and gas, mining, road transport, food, automobiles, agriculture, power generation and textiles. European Sector Sustainability Reporting Standards (ESRS) should clarify how particular sectors impact people and the planet, including on decarbonisation, biodiversity or human rights, as the methods and impacts differ depending on the sector.
Furthermore, since the reporting obligations for non-EU companies with a turnover exceeding 150 million euros and their subsidiaries in the EU with turnover above 40 million euros will only start to apply in 2028, the Commission also proposes to delay the adoption of the general sustainability reporting standards for third-country companies until 2026.
After the vote of the members of the Justice Commission with 21 votes in favour, 2 against with no abstentions, the vote will take place in the plenary session, after which the European Parliament will start negotiations for the drafting of the final version.