Adoption Deadline for New EU Sustainability Reporting Rules Pushed Out

The implementation of sustainability reporting standards for certain sectors and for third-country companies in the EU will be delayed by two years following concerns by industry that there is not enough time to embrace them.

While companies are already required to report against sustainability standards under the Non-financial Reporting Directive (NFRD), which has been in place since 2014, the Corporate Sustainability Reporting Directive (CSRD) which came into force last year requires more detailed sustainability industry-specific disclosures from those already in place.

The new requirements will be phased in, with any EU-incorporated company already subject to the NFRD required to report from 1 January 2024 for its full year 2024 financial reports due to be published in 2025. From 1 January 2025, the new requirements would have also applied to all large companies incorporated in an EU state and EU-incorporated parents of large groups and non-EU subsidiaries of the parent, insurance and reinsurance undertakings and small and non-complex institutions that meet the large company requirements.

However, in late January the European Parliament agreed with a proposed put forward by the European Commission to delay the deadline for the adoption of the new standards until June 2026 to 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,” said the proposal’s rapporteur Axel Voss. The deadline for the adoption of the general sustainability reporting standards by companies from outside the EU but with EU subsidiaries is also delayed until 2026.