Making Sustainability Reporting easier and simplier

 

Some people believe the EU is hitting “pause” on some of its most ambitious sustainability reporting rules, and the debate is heating up.

On April 16, the EU Council released a draft position to reduce and delay new sustainability reporting requirements for companies. The move follows the European Parliament’s recent approval to postpone the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) by up to two years for large companies and listed SMEs:

-            Large companies now have until 2028 to publish their first CSRD-aligned sustainability reports, while listed SMEs get an extra year.

-            The reporting scope is being narrowed, focusing on the biggest players and easing the burden on smaller firms.

-            Some disclosure obligations will only apply when companies make specific sustainability claims, raising concerns about “green hushing” and reduced transparency.

-            The CSDDD’s due diligence requirements are also being softened, with less responsibility for indirect business partners.

 

Now, this is a quite a moment for the European business landscape – and let me explain you why. If you look at most of the comments that are done regarding the EU (and Linkedin’s a good example), they tend to point out the heavy bureaucracy burden that is laid on companies – and all these burdens have costs, directly or indirectly that reduce our European ability to compete effectively in global markets.

The simplification that has just been announced has thus been very well welcomed – I understand when critics warn that delaying and diluting sustainability reporting risks undermining the EU’s Green Deal ambitions, but I personally don’t think it is the case. I think these changes, this simplification, make the legislation easier to adopt, be implemented and result in the desired outcomes. It lessens the bureaucratic unnecessary weight, adopting the measures to the realities of European companies – while clearly showing them the direction. This is still about sustainability and a better environment and future.

And as the regulatory landscape evolves, one thing is clear: transparency and accountability remain at the heart of sustainable business. Companies should use this time to strengthen their ESG strategies, not put them on hold.

So how is your organization preparing for these changes?