The European Commission has announced a significant delay to its landmark corporate sustainability reporting directives, granting businesses more breathing room and preparing accordingly. The Corporate Sustainability Reporting Directive (CSRD) will now come into effect in 2028, while the Corporate Sustainability Due Diligence Directive (CSDDD) will be implemented from July 2028, a year later than originally planned.
These directives apply to all businesses within the Eurozone and UK firms operating in the EU. It is aimed to drive greater transparency and accountability regarding environmental and social impacts. Widespread concerns from businesses struggling to restructure supply chains and meet stringent reporting demands prompted the Commission to revise its timeline.
In a further concession, the Commission has scaled back the scope of the CSRD. Initially, the directive’s carbon emissions reporting requirements will now only apply to companies with more than 1000 employees and a turnover exceeding US $ 53 million, significantly reducing the initial burden on smaller enterprises.
Adding to the relief, the frequency of supply chain assessments for CSDDD compliance has been reduced. Companies will now conduct these assessments every five years, instead of annually, effectively pushing the full impact of rules aimed at tackling human rights and environmental risks in global supply chains into the next decade.
Despite the extended deadlines and reduced scope, the reporting burden remains substantial. Companies are urged to utilize the additional time to implement necessary changes and ensure compliance, as the fundamental objectives of the sustainability directives remain in place. While the extra time is given, the EU clearly states it is still expecting major changes from businesses to comply with the directives when they finally take full effect.
