Lawmakers on the European Parliament’s legal affairs committee (JURI) have agreed to a two-year extension to the deadline for developing sector-specific sustainability reporting standards under the Corporate Sustainability Reporting Directive (CSRD).
The committee’s rapporteur, Axel Voss, said the decision will give the European Financial Reporting Advisory Group (EFRAG), which is charged with developing the standards, “the time to develop quality standards and give companies the time to put them into practice”.
He added: “Companies have been putting up with too much bureaucracy in years of crisis, from COVID to inflation.”
The committee’s resolution means both European Union business and their non-EU counterparts will be expected to apply sector-specific European Sustainability Reporting Standards (ESRS) from 2026.
The decision to delay the implementation of the new standards was welcomed by Eurosif, a pan-European network of over 400 organisations, including institutional investors, asset managers, and ESG research and analysis firms.
Eurosif told IPE: “We support this postponement, which will allow EFRAG to dedicate more time to designing efficient and well-sequenced sectoral standards.
“Such standards are essential to support reporting undertakings in developing comparable and meaningful disclosures and to better identify and disclose material sustainability information.”
Eurosif added that Europe needs a “well-sequenced approach prioritising sectors with high sustainability risks or impacts on the environment and human rights by June 2026”, followed by “sector-specific standards for the financial industry”.
The postponement does not, however, appear on the face of it to signal any significant rowing-back by lawmakers on the European Union’s commitment to sustainability reporting.
In a post-meeting statement, JURI members urged the Commission to release eight sector-specific standards as soon as they are ready ahead of the 2026 deadline.
They also noted that the standards “are essential for enabling investor comparisons between companies”.
The committee’s decision takes the form of an amendment to a European Commission rulemaking proposal.
Under the EU’s legislative process, the JURI resolution, if adopted by the European Parliament, must get the greenlight from EU member states in the European Council.
If member states add their own amendments, the process will return to Parliament for further consideration. In exceptional cases, it is possible to invoke a third round of legislative ping-pong to break any deadlock.
The JURI vote comes as the EU finds itself forced to perform a delicate balancing act on sustainability reporting. On the one hand, the president of the European Commission, Ursula von der Leyen, last March delivered a speech in which she committed to reducing the regulatory burden on business by 25%.
On the other hand, Eurosif members recently issued a call for “the timely development of EU sector-specific standards for sustainability reporting”.
At the same time, businesses around the world are gearing up for their first year of reporting under the International Sustainability Standards Board’s new sustainability rules.
Wednesday’s vote at the European Parliament, said Susanna Arus from law firm Frank Bold, means both the Council and the Commission “will need to find agreement quickly if they wish to pass this change in this mandate”.
No comments yet