European Council and Parliament agree to delay key sustainability reporting standards

The European Council and the European Parliament have reached a provisional deal to delay sustainability reporting standards for certain sectors and third countries, which would amend the Corporate Sustainability Reporting Directive (CSRD).

The Council said that the agreement will give more time for companies to prepare for the sectorial European Sustainability Reporting Standards (ESRS) under the CSRD and specific standards for large non-EU companies, which now look set to be adopted in June 2026, two years later than the originally scheduled date.

“Boosting European competitiveness is a core pillar of the Belgian Presidency, and one way to achieve this objective is to reduce the administrative burden on companies. Today’s agreement limits reporting requirements to the minimum and gives companies time to implement the ESRS and prepare for the sectorial European Sustainability Reporting Standards,” said Vincent Van Peteghem, Belgian deputy prime minister and minister of finance.

EU law requires that listed companies disclose information about risks and opportunities arising from social and environmental issues to help investors, civil society, consumers and other stakeholders evaluate their green and social sustainability.

On 31 July 2023, the Commission adopted the first standards for all sustainability topics to facilitate this reporting. These must be followed by sector-specific standards, standards for SMEs and standards for third-country companies with a €150m turnover in the EU and at least one subsidiary or branch in the EU. All these new standards were scheduled for 30 June 2024.

The directive agreed this week by the co-legislators postpones the adoption of the new standards to 30 June 2026.

“This will allow companies to focus on the implementation of the first set of ESRS. It will also allow more time to develop sector-specific sustainability standards as well as standards for specific third-country companies. The date of application for third-country companies will remain the financial year 2028, as set out in the CSRD,” said the Council in a statement.

It has also suggested that the Commission publishes eight sector-specific reporting standards as soon as it is ready before the new deadline of 30 June 2026.

The provisional agreement reached between the European Council and Parliament now needs to be endorsed and formally adopted by both institutions.