On 3 April 2025, the European Parliament voted to postpone the implementation dates for corporate sustainability due diligence and reporting requirements, as the first step in the European Commission’s “Omnibus” simplification package to reduce administrative requirements of companies and aimed to bolster the competitiveness of the European Union. With 531 votes for, 69 against and 17 abstentions, Members of the European Parliament overwhelmingly supported the European Commission proposal.
Key Aspects of the Postponement:
- Corporate Sustainability Reporting Directive (“CSRD”):
- The application of CSRD has been delayed by two years for certain companies.
- “Large companies”, as defined in CSRD, are now required to report on financial year of 2027, to be published in 2028.
- Listed small and medium-sized enterprises (SMEs) will commence reporting one year later on their 2028 financial year, to be published in 2029.
- The second stage of the Omnibus is proposed to alter these thresholds, to significantly reduce the scope of companies needing to report, which we covered in our alert here.
- Corporate Sustainability Due Diligence Directive (“CSDDD”):
- Member States now have until 26 July 2027 to transpose the due diligence directive into national law, extending the deadline by one year.
- Large EU companies with over 5,000 employees and a net turnover exceeding €1.5 billion, as well as non-EU companies meeting the same turnover threshold within the EU, are required to comply with the rules starting in 2028.
- Similarly, EU companies with more than 3,000 employees and a net turnover above €900 million, along with equivalent non-EU companies, will also need to adhere to these regulations from 2028.
To expedite the adoption of these postponement measures, the European Parliament agreed on 1 April 2025 to handle the proposals under its urgent procedure. The draft law now awaits formal approval by the Council of the European Union, which endorsed the same text on 26 March 2025.
Whilst the updates to the reporting standards and exact scope of companies required to report remains under development as part of the second stage of the Omnibus, as we reported on here, there is at least certainty for businesses on a delay.
For further information or to discuss reporting options, please reach out to ukreg@proskauer.com