COM(2025) 80 Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives (EU) 2022/2464 and (EU) 2024/1760 as regards the dates from which Member States are to apply certain corporate sustainability reporting and due diligence requirements

    Resolutsiooni liik: Riigikantselei resolutsioon Viide: Rahandusministeerium /  / ; Riigikantselei /  / 2-5/25-00409

Resolutsiooni teema: Ettevõtete kestlikkusaruandlust ja ettevõtete hoolsuskohustust puudutavate direktiivide muutmine

Adressaat: Justiits- ja Digiministeerium, Rahandusministeerium Ülesanne: Tulenevalt Riigikogu kodu- ja töökorra seaduse § 152` lg 1 p 2 ning Vabariigi Valitsuse reglemendi § 3 lg 4 palun valmistada ette Vabariigi Valitsuse seisukoha ja otsuse eelnõu järgnevate algatuste kohta, kaasates seejuures olulisi huvigruppe ja osapooli:

- Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives (EU) 2022/2464 and (EU) 2024/1760 as regards the dates from which Member States are to apply certain corporate sustainability reporting and due diligence requirements, COM(2025) 80;

- Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760 as regards certain corporate sustainability reporting and due diligence requirement, COM(2025) 81.

EISi toimiku nr: 25-0076

Tähtaeg: 24.03.2025

Adressaat: Kliimaministeerium, Majandus- ja Kommunikatsiooniministeerium Ülesanne: Palun esitada oma sisend Rahandusministeeriumile seisukohtade kujundamiseks kestlikkusaruandlust, auditeerimist ja raamatupidamist puudutavate eelnõude osas ning Justiits- ja Digiministeeriumile seisukohtade kujundamiseks äriühingute hoolsuskohustust puudutavate eelnõude osas (eelnõude infosüsteemi (EIS) kaudu).

Tähtaeg: 14.03.2025

Lisainfo: Eelnõu on kavas arutada valitsuse 10.04.2025 istungil ja Vabariigi Valitsuse reglemendi § 6 lg 6 kohaselt 26.03.2025 EL koordinatsioonikogus. Esialgsed materjalid EL koordinatsioonikoguks palume esitada hiljemalt 24.03.2025.

Kinnitaja: Merli Vahar, Euroopa Liidu asjade direktori asetäitja Kinnitamise kuupäev: 06.03.2025 Resolutsiooni koostaja: Elen Nurme [email protected], 693 5201  

.

EN EN

EUROPEAN COMMISSION

Brussels, 26.2.2025

COM(2025) 80 final

2025/0044 (COD)

Proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Directives (EU) 2022/2464 and (EU) 2024/1760 as regards the dates from

which Member States are to apply certain corporate sustainability reporting and due

diligence requirements

(Text with EEA relevance)

{SWD(2025) 80}

EN 1 EN

EXPLANATORY MEMORANDUM

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

General context and objectives

In his report on ‘The Future of European Competitiveness’, Mario Draghi emphasised the

need for Europe to create a regulatory landscape which facilitates competitiveness and

resilience, drawing attention to burden and compliance costs created by the Corporate

Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence

Directive (CSDDD).1 In the Budapest Declaration on the New European Competitiveness

Deal, EU Heads of State and Government called for ‘a simplification revolution, ensuring a

clear, simple and smart regulatory framework for businesses and drastically reducing

administrative, regulatory and reporting burdens, in particular for SMEs’. 2 They called on the

Commission to make concrete proposals to reduce reporting requirements by at least 25% in

the first half of 2025.

In its Communication on the Competitive Compass for the EU, the Commission confirmed

that it would propose a first ‘Simplification Omnibus package’ which would include far-

reaching simplification in the fields of sustainable finance reporting, sustainability due

diligence and taxonomy.3 In its Communication entitled ‘A simpler and faster Europe:

Communication on implementation and simplification’, the Commission set out an

implementation and simplification agenda that delivers fast and visible improvements for

people and business on the ground, requiring more than an incremental approach and

underlining the need for bold action to streamline and simplify EU, national and regional

rules.4

The CSRD entered into force on 5 January 2023.5 It strengthened and modernised corporate

sustainability reporting requirements through modifications to the Accounting Directive, the

Transparency Directive, the Audit Directive and the Audit Regulation.6 The CSRD is an

important element of the European Green Deal and of the Sustainable Finance Action Plan.7 It

aims to ensure that investors have the information they need to understand and manage the

risks to which investee companies are exposed from climate change and other sustainability

issues. It also aims to ensure that investors and other stakeholders have the information they

1 “The future of European competitiveness”, September 2024. 2 Budapest Declaration on the New European Competitiveness Deal, 8 November 2024. 3 Communication from the Commission to the European Parliament, the European council, the Council,

the European Economic and Social Committee and the Committee of the Regions, COM (2025) 30 final: A

Competitiveness Compass for the EU. 4 Communication from the Commission to the European Parliament, the Council, the European

Economic and Social Committee and the Committee of the Regions, COM (2025) 47 final: A simpler and faster

Europe: Communication on implementation and simplification. 5 Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022

(Corporate Sustainability Reporting Directive). 6 Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 (Accounting

Directive). Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004

(Transparency Directive). Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006

(Audit Directive). Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April

2014 (Audit Regulation). 7 Communication from the Commission, ‘The European Green Deal, COM(2019) 640 final.

Communication from the Commission ‘Action Plan: Financing Sustainable Growth’, COM/2018/097 final.

EN 2 EN

need about the impacts of companies on people and the environment. It thereby contributes to

financial stability and environmental integrity. This is a necessary condition for financial

resources to flow to companies that pursue sustainability goals and creates more

accountability and transparency towards all stakeholders regarding companies’ sustainability

performance.

The CSDDD was adopted on 13 June 2024. Its objective is to contribute to the European

Union's broader ambition to transition towards a sustainable and climate-neutral economy as

outlined in the European Green Deal. It requires companies to identify and address adverse

human rights and environmental impacts in their own operations, those of their subsidiaries

and their chains of activities.

The CSRD and the CSDDD are now being implemented in a new and difficult context.

Russia’s war of aggression against Ukraine has driven up energy prices for EU undertakings.

Trade tensions are rising as the geopolitical landscape continues to shift. The different

approach undertaken by some other major jurisdictions regarding the regulation of corporate

sustainability reporting and due diligence raises questions about the effects of these laws on

the competitive positioning of EU companies. The ability of the Union to preserve and protect

its values depends amongst other things on the capacity of its economy to adapt and compete

in an unstable and sometimes hostile geopolitical context.

This proposal therefore postpones the entry into application of the CSDDD and of certain

provisions of the CSRD.

Specific context and objectives of this proposal regarding the CSRD

The CSRD currently applies to large undertakings, SMEs with securities listed on the EU

regulated markets, parent undertakings of large groups, as well as to issuers that belong to

these categories of undertakings. The entry into application of the reporting requirements

introduced by the CSRD is phased in according to different categories of undertakings. In the

first wave, large public interest entities with more than 500 employees must report for the first

time in 2025 for financial year 2024.8 In the second wave, the other large undertakings must

report in 2026 for financial year 2025.9 In the third wave, SMEs with securities listed in EU

regulated markets must report in 2027 for financial year 2026, although they have a

possibility to opt out of reporting for financial years 2026 and 2027.10 In the fourth wave,

certain non-EU undertakings that have business in the territory of the Union above certain

thresholds must report in 2029 for financial year 2028.11

8 As well as public-interest entities that are parent undertakings of a large group with more than 500

employees, for consolidated sustainability reporting. “Public-Interest Entities” are defined by Article 2 point (1)

of the Accounting Directive as undertakings that are: (a) governed by the law of a Member State and whose

transferable securities are admitted to trading on an EU regulated market; (b) credit institutions; (c) insurance

undertakings; or (d) designated by Member States as public-interest entities. “Large undertakings” are defined by

Article 3(4) of the Accounting Directive as undertakings which on their balance sheet dates exceed at least two

of the three following criteria: (a) balance sheet total: EUR 25 000 000; (b) net turnover: EUR 50 000 000; (c)

average number of employees during the financial year: 250. 9 As well as the other parent undertakings of large groups, for consolidated sustainability reporting. 10 Small and non-complex credit institutions, and captive insurance and reinsurance undertakings, are also

part of the third wave, although they may only use the additional two-year opt-out if they are listed SMEs. 11 According to article 40a of the Accounting Directive, as amended by the CSRD, an undertaking not

established in the EU must report sustainability information at the group level if it a) generates over EUR 150

million in the Union and b) has either a subsidiary in the EU that is subject to the sustainability reporting

EN 3 EN

The CSRD requires undertakings in scope to report sustainability information according to

mandatory European Sustainability Reporting Standards (ESRS) and requires the Commission

to adopt such standards through delegated acts. In July 2023 the Commission adopted a first

set of ESRS which are sector-agnostic, meaning they are to be applied by all undertakings in

scope independently of the sector of the economy in which the undertaking operates.12 The

CSRD also requires the Commission to adopt sector-specific reporting standards, with a first

set of such standards to be adopted by June 2026. The CSRD allows listed SMEs to report

using a separate and lighter, proportionate set of standards instead of the full set of ESRS.

At the request of the Commission, EFRAG has submitted a sustainability reporting standard

for voluntary use by SMEs that are not in scope of the reporting requirements (VSME

standard).13 The objective of the VSME standard is to provide SMEs with a simple, widely

recognised tool through which they can provide sustainability information to banks, large

companies and other stakeholders that may demand such information.

Other important aspects of the CSRD are the provisions on assurance and on reporting value-

chain information. Undertakings must publish their sustainability information together with

the opinion of a statutory auditor or, if the Member States allows, an independent assurance

service provider. The current requirement is for limited assurance and the CSRD provides that

this could in the future become a requirement for reasonable assurance under certain

conditions.14 The CSRD also requires the Commission to adopt standards for sustainability

assurance by means of delegated acts.

The CSRD requires undertakings to report value-chain information to the extent necessary for

understanding their sustainability-related impacts, risks and opportunities. The CSRD

establishes a so-called value-chain cap, which states that ESRS may not contain reporting

requirements that would require undertakings to obtain from SMEs in their value chain

information that exceeds the information to be disclosed under the proportionate standard for

listed SMEs.

This proposal aims to reduce the reporting burden and to limit the trickle down of obligations

on smaller companies. Firstly, the separate legislative proposal made by the Commission in

parallel to this proposal would simplify the framework and reduce burden in the following

ways:

– The number of undertakings subject to mandatory sustainability reporting

requirements would be reduced by about 80%, taking out of scope large undertakings

with up to 1000 employees (i.e. some of the undertakings from the second wave and

some of the undertakings from the first wave) and listed SMEs (i.e. all undertakings

requirements introduced by the CSRD or has an EU branch that generates over EUR 40 million. In this case, the

legal obligation to publish the report falls on the EU subsidiary or branch. 12 Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive

2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards. 13 EFRAG was previously called the European Financial Reporting Advisory Group but its official name

is now just EFRAG. It is an independent private multistakeholder body, majority funded by the EU. 14 The amount of work for a limited assurance engagement is significantly less than for a reasonable

assurance engagement. The conclusion of a limited assurance engagement is usually provided in a negative form

of expression by stating that no matter has been identified by the assurance provider to conclude that the subject

matter is materially misstated. The conclusion of a reasonable assurance engagement is usually provided in a

positive form of expression and results in providing an opinion on the measurement of the subject matter against

previously defined criteria.

EN 4 EN

in the third wave). The reporting requirements would only apply to large

undertakings with more than 1000 employees on average (i.e. undertakings that have

more than 1000 employees and either a turnover above EUR 50 million or a balance

sheet above EUR 25 million). This revised threshold would align the CSRD more

closely with the CSDDD.15

– For undertakings not subject to mandatory sustainability reporting requirements, the

Commission proposes a proportionate standard for voluntary use which would be

based on the VSME standard developed by EFRAG. According to this proposal, the

Commission would adopt this voluntary standard as a delegated act. In the meantime,

to address market demand, the Commission intends to issue a recommendation on

voluntary sustainability reporting as soon as possible, based on the VSME standard

developed by EFRAG.

– The value-chain cap would be extended and strengthened. It would apply directly to

the reporting company instead of being only a limit on what ESRS can specify. It

would protect all undertakings with up to 1000 employees rather than just SMEs as is

currently the case. And the limit would be defined by the voluntary standard adopted

by the Commission as a delegated act, based on the VSME standard developed by

EFRAG. This will substantially reduce the trickle-down effect.

– There would be no sector-specific reporting standards, so avoiding an increase in the

number of prescribed datapoints that undertakings should report.

– The possibility of moving from a requirement for limited assurance to a requirement

for reasonable assurance would be removed. This will provide clarity that there will

be no future increase in costs of assurance for undertakings in scope.

– Instead of an obligation for the Commission to adopt standards for sustainability

assurance by 2026, the Commission will issue targeted assurance guidelines by 2026.

This will allow the Commission to more quickly address emerging issues in the field

of sustainability assurance that may be generating unnecessary burden on

undertakings that are subject to the reporting requirements.

– The proposal introduces an “opt-in” regime where large undertakings with more than

1000 employees on average (i.e. undertakings that have more than 1000 employees

and either a turnover above EUR 50 million or a balance sheet above EUR 25

million) and a net turnover not exceeding EUR 450 million which claim that their

activities are aligned or partially aligned with the EU Taxonomy shall disclose their

turnover and CapEx KPIs and may choose to disclose their OpEx KPI. This “opt-in”

approach will eliminate entirely the cost of compliance with the Taxonomy reporting

rules for large undertakings with more than 1000 employees on average (i.e.

undertakings that have more than 1000 employees and either a turnover above EUR

50 million or a balance sheet above EUR 25 million) and a net turnover not

exceeding EUR 450 million which do not claim that their activities are associated

with economic activities that qualify as environmentally sustainable under the

Taxonomy Regulation. In addition, this proposal provides more flexibility by

15 In addition and for reasons of consistency, in Article 40a of the Accounting Directive, the net turnover

threshold for an undertaking not established in the EU to be subject to the reporting requirements at the group

level would be raised from EUR 150 million generated in the Union to EUR 450 million. Furthermore, for

reasons of consistency, the threshold for the EU branch under article 40a is raised from EUR 40 million to EUR

50 million and the threshold for the EU subsidiary is limited to large undertakings as defined in the Accounting

Directive. The key thresholds of the CSDDD are 1000 employees and EUR 450 million turnover.

EN 5 EN

allowing these undertakings to report on activities that meet certain Taxonomy

technical screening criteria without meeting all of them. Such reporting on partial

alignment can foster a gradual environmental transition of activities overtime, in line

with the aim to scale up transition finance.

Secondly, the Commission intends to adopt without delay a delegated act to revise the first set

of ESRS. To deliver swiftly on the simplification and streamlining of the ESRS, and to

provide clarity and legal certainty to undertakings, the Commission aims to adopt the

necessary delegated act as soon as possible, and at the latest six months after the entry into

force of the Directive to simplify the reporting framework that is the subject of the separate

legislative proposal referred to above. The revision of the delegated act will substantially

reduce the number of mandatory ESRS datapoints by (i) removing those deemed least

important for general purpose sustainability reporting, (ii) prioritising quantitative datapoints

over narrative text and (iii) further distinguishing between mandatory and voluntary

datapoints, without undermining interoperability with global reporting standards and without

prejudice to the materiality assessment of each undertaking. The revision will clarify

provisions that are deemed unclear. It will improve consistency with other pieces of EU

legislation. It will provide clearer instructions on how to apply the materiality principle, to

ensure that undertakings only report material information and to reduce the risk that assurance

service providers inadvertently encourage undertakings to report information that is not

necessary or dedicate excessive resources to the materiality assessment process. It will

simplify the structure and presentation of the standards. It will further enhance the already

very high degree of interoperability with global sustainability reporting standards. It will also

make any other modifications that may be considered necessary considering the experience of

the first application of ESRS.

Thirdly, this proposal would postpone by two years the entry into application of the reporting

requirements for the second wave (large undertakings that are not public interest entities and

that have more than 500 employees, as well as large undertakings with fewer than 500

employees16) and the third wave (listed SMEs, small and non-complex credit institutions, and

captive insurance and reinsurance undertakings). The objective of the postponement is to

avoid a situation in which certain undertakings are required to report for financial year 2025

(second wave) or 2026 (third wave) and are then subsequently relieved of this requirement.

Such a situation would mean that the undertakings in question incur unnecessary and

avoidable costs.

The Commission invites co-legislators to reach rapid agreement on the proposed

postponement, in particular to provide the necessary legal clarity for undertakings in the

second wave that are currently required to report for the first time in 2026 for financial year

2025.

Specific context and objectives of this proposal regarding the CSDDD

According to the current rules, Member States should transpose the CSDDD by 26 July 2026.

Entry into application is envisaged in three phases: as from July 2027, the rules would start

applying only to the largest EU companies, i.e. those that have more than 5000 employees and

report a net annual (worldwide) turnover of more than 1.5 billion euro, as well as to non-EU

companies that generate more than EUR 1.5 billion net turnover in the EU. In the second

16 As well as undertakings that are not public-interest entities and that are parent of large groups with

more than 500 employees, and undertakings that are parents of large groups with fewer than 500 employees.

EN 6 EN

wave, EU companies with more than 3000 employees and more than EUR 900 million net

turnover, as well as non-EU companies generating such net turnover in the EU would need to

comply with the new framework as from July 2028. Last, in July 2029, all other companies

falling under the general scope would have to start applying the (national rules transposing

the) Directive. As from this date, the CSDDD is estimated to apply to approximately 6000

large EU companies, and some 900 non-EU companies. The personal scope and phased-in

application take into account that companies of different size have different capacities to

implement the new mandatory framework and, as such, is a key element in ensuring a

proportional approach.

In addition, the separate legislative proposal made by the Commission in parallel with this

proposal would simplify the framework and reduce companies’ burden in a number of ways.

This proposal would postpone the first phase of the entry into application of the Directive by

one year. The objective of the postponement is to provide additional time for the first group of

companies to prepare for their obligations under the Directive, as amended, also taking into

account the guidelines that the Commission will have adopted in accordance with the tighter

timeline set out in the parallel simplification proposal.

Moreover, this proposal would postpone the transposition deadline for the Member States by

one year to account for possible delays in their ongoing CSDDD transposition efforts due to

possible amendments to the Directive by the parallel simplification proposal.

• Consistency with existing policy provisions in the policy area

Undertakings that are subject to the CSRD reporting requirements are also automatically

required to report certain indicators under article 8 of the Taxonomy Regulation. By

postponing the application of the reporting requirements for companies in the second and

third waves, this proposal would therefore also automatically postpone the date by when such

companies must report those indicators under the Taxonomy Regulation.

The reporting requirements set out in the CSRD and ESRS aim to ensure, amongst other

things, that financial market participants, credit institutions and benchmark administrators

have access to the sustainability information that they need from undertakings to meet their

own reporting obligations under the Sustainable Finance Disclosure Regulation, the Capital

Requirements Regulation and the Benchmarks Regulation. The proposed postponement will

delay improvements to availability of information for financial market participants, credit

institutions and benchmark administrators.

Undertakings subject to both the CSRD and the CSDDD are not required by the CSDDD to

report any information additional to what they are required to report under the CSRD. Since

this proposal postpones the measures foreseen in the CSDDD as well as the date of

application of the reporting requirements for certain undertakings under the CSRD, meaning

that the consistency between these two pieces of legislation is maintained.

• Consistency with other Union policies

This proposal is consistent with EU policy to enhance competitiveness, to simplify the

regulatory framework and to reduce burden on business while still achieving the policy goals

of the CSRD and CSDDD. This includes preserving the Green Deal as mid- to long-term

competitiveness depends on companies sufficiently integrating sustainability considerations

into their operations.

EN 7 EN

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The proposal’s legal basis rests on Articles 50 and 114 of the Treaty on the Functioning of the

European Union (TFEU). Article 50 of the TFEU is the legal basis for adopting EU measures

aimed at attaining the right of establishment in the single market in company law, and it

mandates the European Parliament and the Council to act by means of Directives. Article 114

of the TFEU is a general legal basis with the objective of establishing or ensuring the

functioning of the single market – in this case, the free movement of capital. Articles 50 and

114 of the TFEU are the legal basis for Directive (EU) 2022/2464 and Directive (EU)

2024/1760.

• Subsidiarity (for non-exclusive competence)

This proposal modifies the dates of entry of application of certain provisions of EU law.

These dates can only be modified through action at EU level.

• Proportionality

The policy objective is to delay the dates of entry of application of certain provisions of EU

law. There only means of achieving that objective is to propose to modify those dates

• Choice of the instrument

This proposal is composed of a Directive that amends provisions of the Corporate

Sustainability Reporting Directive (CSRD) and of the Corporate Sustainability Due Diligence

Directive (CSDDD). An Omnibus Directive is considered to be the most appropriate legal

instrument to amend existing Directives as regards simplification and burden reduction in the

area of sustainability reporting and due diligence.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER

CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

The CSDDD has not yet been transposed or applied by companies. The CSRD has been

applied by a first set of companies who are publishing their first sustainability statements

mainly in the first half of 2025. It has therefore not been possible to undertake an ex-post

evaluation or fitness check of either piece of legislation.

• Stakeholder consultations

The following consultation activities have helped to shape the content of this proposal.

- European Commission ‘Call for evidence on the rationalisation of reporting

requirements’, from October to December 2023.17

17 From 17 October to 1 December 2023, the Commission gathered feedback from 193 stakeholders on

possible rationalization measures for reporting requirements. The main contributors came from business

associations (84), companies (35), followed by public authorities (23) and non-governmental organisations (18).

In terms of geographical coverage, the stakeholders came mainly came from Germany (53), Belgium (47),

France (7), Lithuania (8), the Netherlands (6), Italy (5), and Austria (4). Feedback included also the call for the

use of digitalisation and smoother data flows, the re-use of data and standards, availability of clear and

timely guidance and to remove overlaps and inconsistencies in the

EN 8 EN

- European Commission ‘Reality Check on Sustainability Reporting and Roundtable on

Simplification’ in early February 2025.

- The European Commission has also held separate stakeholder activities including two

large hybrid stakeholder forums on the CSRD in May and November 2024 with the

participation of more than 400 people in person and more than 3000 people virtually.

- The European Commission received a very significant number of letters and detailed

analyses from all types of stakeholders (from companies to investors, banks, civil

society, Non-Governmental Organisations, chambers of commerce and Member

States’ national administrations).

Corporate Sustainability Reporting Directive

The European Commission’s Call for Evidence on the Rationalisation of Reporting

Requirements sought evidence and views regarding regulations which are perceived to

produce administrative burden. Almost 200 stakeholders responded, and primarily called for a

simplification of sustainability reporting, due diligence and the EU Taxonomy.

In the European Commission’s meetings with European industry, social partners and civil

society in early February 2025, stakeholders expressed support for the overarching objectives

of the CSRD and CSDDD but highlighted a need for simplification and harmonisation in their

implementation.

Some stakeholders, particularly business and industry groups, suggested pausing the

application of existing legislation to focus on simplification. They argued that a postponement

of the reporting requirements of the CSRD would give the Commission the opportunity to

simplify the framework while allowing companies more time to prepare for any impending

changes.

Other stakeholders, particularly civil society groups, saw strong merits in maintaining the

rules and argued for the importance of legal certainty and regulatory stability for companies,

as well as for maintaining the objectives of the European Green Deal and the Sustainable

Finance Action Plan. They also highlighted that implementation guidelines should be used to

clarify and simplify certain parts of the sustainability reporting framework, instead of a

postponement or change to the existing rules.

The need for simplification has also been echoed by many other reports, recommendations,

and stakeholder views from both financial and non-financial sector undertakings, many of

which underscore the importance of reducing complexity and administrative burdens and

which have informed the burden reduction measures described in this proposal.

Corporate Sustainability Due Diligence Directive

Consultations with various stakeholders, including businesses, trade associations, and civil

society organizations, as well as other contacts with and inputs received from stakeholders

have informed the proposal. This includes, in particular, a two days-stakeholder event that

allowed the Commission to hear from practitioners about which challenges they see with the

current legislative framework and what could be possible solutions to address them. While

some stakeholders called for far-reaching changes and postponements, others emphasized the

legislation. https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13990-Administrative-

burden-rationalisation-of-reporting-requirements_en

EN 9 EN

need for regulatory certainty and opposed reopening the Directive, instead focusing on

implementation. The proposal, together with the parallel proposal on simplification, aims to

balance these perspectives by maintaining the integrity of the CSDDD while introducing

changes to simplify and streamline the Directive.

• Collection and use of expertise

Not applicable.

• Impact assessment

This proposal is accompanied by a Commission Staff Working Document that includes an

analysis of the impacts of the proposed measures. Given the urgent need to put forward

proposals to address the identified problems, it has not been possible to prepare a full impact

assessment.

• Regulatory fitness and simplification

This proposal is expressly designed to facilitate a major simplification of the sustainability

reporting regime.

• Fundamental rights

Corporate Sustainability Reporting Directive

The proposal respects the fundamental rights enshrined, and adheres to the principles stated,

in the Charter of Fundamental Rights of the European Union. The Corporate Sustainability

Reporting Directive has an indirect positive impact on fundamental rights, given that

sustainability reporting requirements can influence corporate behaviour for the better. It

serves to make companies more aware of fundamental rights and positively influence how

they identify and manage actual and potential adverse impacts on fundamental rights. The

proposed postponement would also delay these positive impacts with regard to companies that

would start applying the reporting requirements at a later date. However the reduction of

burden on such companies, and especially the reduction of burden on companies that would

be taken out of the CSRD scope by the separate proposal made by the Commission in parallel

to this proposal, should lead to other societal gains in terms of wealth creation, employment

and innovation, including innovation for sustainability.

Corporate Sustainability Due Diligence Directive

The proposal respects the fundamental rights enshrined, and adheres to the principles stated,

in the Charter of Fundamental Rights of the European Union. The CSDDD has protection and

promotion of fundamental rights as one of its main objectives. It requires very large

companies to identify and address adverse human rights and environmental impacts in their

own operations, those of their subsidiaries and their chains of activities. The proposed

postponement would delay these positive impacts with regard to the first group of companies

in the scope of the Directive that would start applying the due diligence requirements at a later

date.

4. BUDGETARY IMPLICATIONS

The proposal does not have any budgetary implications.

EN 10 EN

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

Not applicable.

• Explanatory documents (for directives)

No explanatory documents are considered necessary.

• Detailed explanation of the specific provisions of the proposal

Article 1 amends Article 5(2) of Directive (EU) 2022/2464 (Corporate Sustainability

Reporting Directive “CSRD”) by introducing a 2-year postponement of the sustainability

reporting requirements for all companies in the CSRD scope that are required to comply from

financial year 2025 or 2026 depending on their size.

In particular:

– Paragraph (1) point (a) requires Member States to ensure that the following

undertakings report on sustainability from financial years starting on or after 1

January 2027 (instead of 1 January 2025):

• large undertakings with not more than 500 employees on average during the

financial year;

• large undertakings with more than 500 employees on average during the

financial year but that are not public-interest entities;

• parent undertakings of a large group with more than 500 employees on average

on its balance sheet dates, on a consolidated basis, during the financial year;

• parent undertakings of a large group with more than 500 employees on average

on its balance sheet dates, on a consolidated basis, during the financial year, but

that are not public-interest entities;

– paragraph (1) point (b) requires Member States to ensure that SMEs with securities

admitted to trading on an EU regulated market, small and non-complex institutions

(provided they are large undertakings or listed SMEs) and EU captive (re)insurance

undertakings (provided they are large undertakings or listed SMEs) report on

sustainability from financial years starting on or after 1 January 2028 (instead of 1

January 2026);

– paragraph (2) point (a) requires Member States to ensure that the following issuers

report on sustainability from financial years starting on or after 1 January 2027

(instead of 1 January 2025):

• issuers that are large undertakings with not more than 500 employees on average

during the financial year;

• issuers that are parent undertakings of a large group with not more than 500

employees on average, on a consolidated basis, during the financial year;

– paragraph (2) point (b) requires Member States to ensure that issuers that are SMEs,

small and non-complex institutions (provided they are large undertakings or listed

SMEs) and EU captive (re)insurance undertakings (provided they are large

undertakings or listed SMEs) report on sustainability from financial years starting on

or after 1 January 2028 (instead of 1 January 2026).

EN 11 EN

Article 2 amends Article 37 of Directive (EU) 2024/1760 (Corporate Due Diligence Directive

"CSDDD”) by postponing the transposition deadline as well as the application of the

Directive by 1 year for the first group of companies in the scope of the Directive.

Article 3 requires Member States to transpose Article 1 of this Directive by 31 December

2025 at the latest, and to communicate to the Commission the text of their transposing

measures.

Article 4 specifies that this Directive enters into force on the day following that of its

publication in the Official Journal of the European Union.

EN 1 EN

2025/0044 (COD)

Proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Directives (EU) 2022/2464 and (EU) 2024/1760 as regards the dates from

which Member States are to apply certain corporate sustainability reporting and due

diligence requirements

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular

Articles 50 and 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee18,

Acting in accordance with the ordinary legislative procedure,

Whereas:

(1) In its Communication of 11 February 2025 entitled ‘A simpler and faster Europe:

Communication on implementation and simplification’19, the Commission set out a

vision for an implementation and simplification agenda that delivers fast and visible

improvements for people and business on the ground. That requires more than an

incremental approach and the Union is to take bold action to achieve that goal. The

Commission, the European Parliament, the Council, Member States’ authorities at all

levels and stakeholders need to work together to streamline and simplify Union,

national and regional rules and implement policies more effectively.

(2) In the context of the Commission’s commitment to reduce reporting burdens and

enhance competitiveness, it is necessary to introduce targeted amendments to

Directives (EU) 2022/246420 and (EU) 2024/176021 of the European Parliament and of

18 OJ C […], […], p. […]. 19 Communication from the Commission to the European Parliament, the Council, the European

Economic and Social Committee and the Committee of the Regions of 11 February 2025, ‘A simpler

and faster Europe: Communication on implementation and simplification’, COM(2025) 47 final. 20 Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022

amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive

2013/34/EU, as regards corporate sustainability reporting (OJ L 322, 16.12.2022, p. 15,

ELI: http://data.europa.eu/eli/dir/2022/2464/oj). 21 Directive (EU) 2024/1760 of the European Parliament and of the Council of 13 June 2024 on corporate

sustainability due diligence and amending Directive (EU) 2019/1937 and Regulation (EU) 2023/2859

(OJ L, 2024/1760, 5.7.2024, ELI: http://data.europa.eu/eli/dir/2024/1760/oj).

EN 2 EN

the Council, to achieve those objectives, whilst maintaining the policy objectives of

the Green Deal22 and the Sustainable Finance Action Plan23.

(3) Article 5(2) first subparagraph of Directive (EU) 2022/2464 specifies the dates from

which Member States are to apply the sustainability reporting requirements set out in

Directive 2013/34/EU of the European Parliament and of the Council24, with different

dates depending on the size of the undertaking concerned. Large undertakings that are

public-interest entities with more than 500 employees on average during the financial

year, and public-interest entities that are parent undertakings of a large group with

more than 500 employees on average, on its balance sheet dates, on a consolidated

basis, during the financial year, are to report in 2025 for financial years beginning on

or after 1 January 2024. The other large undertakings, and the other parent

undertakings of a large group, are to report in 2026 for financial years beginning on or

after 1 January 2025. Small and medium-sized undertakings - excluding micro-

undertakings -, small and non-complex institutions and captive (re)insurance

undertakings are to report in 2027 for financial years beginning on or after 1 January

2026. Considering the ongoing Commission’s initiatives aiming at simplifying certain

existing sustainability reporting obligations and to reduce the undertakings’ related

administrative burden, to provide for legal clarity, and to avoid that the undertakings

currently required to report for financial years beginning on or after 1 January 2025

and on or after 1 January 2026 incur unnecessary and avoidable costs, the

sustainability reporting requirements for those undertakings should be postponed by

two years respectively.

(4) Article 5(2), third subparagraph of Directive (EU) 2022/2464 specifies the dates from

which Member States are to apply the sustainability reporting requirements set out in

Directive 2004/109/EC of the European Parliament and of the Council25, with different

dates depending on the size of the issuer concerned. Issuers that are large undertakings

with more than 500 employees on average during the financial year, and issuers that

are parent undertakings of a large group with more than 500 employees on average, on

its balance sheet dates, on a consolidated basis, during the financial year, are to report

in 2025 for financial years beginning on or after 1 January 2024. The other issuers that

are large undertakings, and the other issuers that are parent undertakings of a large

group, are to report in 2026 for financial years beginning on or after 1 January 2025.

Issuers that are small and medium-sized undertakings - excluding micro-undertakings

-, small and non-complex institutions and captive (re)insurance undertakings are to

report in 2027 for financial years beginning on or after 1 January 2026. Considering

22 Communication from the Commission to the European Parliament, the European Council, the Council,

the European Economic and Social Committee and the Committee of the Regions of 11 December

2019, ‘The European Green Deal’, COM/2019/640 final. 23 Communication from the Commission to the European Parliament, the European Council, the Council, the

European Central Bank, the European Economic and Social Committee and the Committee of the Regions, ‘Action

Plan: Financing Sustainable Growth’, COM/2018/097 final. 24 Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual

financial statements, consolidated financial statements and related reports of certain types of

undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and

repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19,

ELI: http://data.europa.eu/eli/dir/2013/34/oj). 25 Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the

harmonisation of transparency requirements in relation to information about issuers whose securities are

admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 390, 31.12.2004,

p. 38, ELI: http://data.europa.eu/eli/dir/2004/109/oj).

EN 3 EN

the ongoing Commission’s initiatives aiming at simplifying certain existing

sustainability reporting obligations and to reduce the undertakings’ related

administrative burden, to provide for legal clarity, and to avoid that the issuers

currently required to report for financial years beginning on or after 1 January 2025

and on or after 1 January 2026 incur unnecessary and avoidable costs, the

sustainability reporting requirements for those issuers should be postponed by two

years respectively.

(5) The date by which Member States are to apply Directive 2024/1760 should be

postponed by one year for the first group of companies in the scope of that Directive,

to give companies more time to prepare for the requirements of that Directive and to

provide them with the opportunity to take into account the guidelines to be issued by

the Commission on how they should fulfil their due diligence obligations in a practical

manner.

(6) Moreover, in light of the parallel legislative proposal aiming at simplifying the

sustainability framework and reduce burdens for companies, the deadline for the

Member States to transpose Directive 2024/1760 should be extended by one year to

account for possible delays in their ongoing transposition efforts due to possible

amendments to that Directive.

(7) Since the objectives of this Directive cannot be sufficiently achieved by the Member

States but can rather, by reason of the scale or effects of the action, be better achieved

at Union level, the Union may adopt measures, in accordance with the principle of

subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance

with the principle of proportionality as set out in that Article, this Directive does not

go beyond what is necessary to achieve those objectives.

(8) Directives (EU) 2022/2464 and (EU) 2024/1760 should therefore be amended

accordingly.

(9) For reasons of urgency and to provide legal certainty as soon as possible, this

Directive should enter into force on the day following that of its publication,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Amendments to Directive (EU) 2022/2464

In Directive (EU) 2022/2464, Article 5(2) is amended as follows:

(1) the first subparagraph is amended as follows:

(a) in point (b), the introductory wording is replaced by the following:

‘for financial years starting on or after 1 January 2027:’;

(b) in point (c), the introductory wording is replaced by the following:

‘for financial years starting on or after 1 January 2028:’;

(2) the third subparagraph is amended as follows:

(a) in point (b), the introductory wording is replaced by the following:

‘for financial years starting on or after 1 January 2027:’;

(b) in point (c), the introductory wording is replaced by the following:

EN 4 EN

‘for financial years starting on or after 1 January 2028:’.

Article 2

Amendments to Directive (EU) 2024/1760

In Article 37(1) of Directive (EU) 2024/1760, the first and second subparagraphs are replaced

by the following:

‘Member States shall adopt and publish, by 26 July 2027, the laws, regulations and

administrative provisions necessary to comply with this Directive. They shall forthwith

communicate the text of those measures to the Commission.

They shall apply those measures:

(a) from 26 July 2028 as regards companies referred to in Article 2(1), points (a) and (b),

which are formed in accordance with the legislation of the Member State and that

had more than 3 000 employees on average and generated a net worldwide turnover

of more than EUR 900 000 000 in the last financial year preceding 26 July 2028 for

which annual financial statements have been or should have been adopted, with the

exception of the measures necessary to comply with Article 16, which Member

States shall apply to those companies for financial years starting on or after 1 January

2029;

(b) from 26 July 2028 as regards companies referred to in Article 2(2), points (a) and (b),

which are formed in accordance with the legislation of a third country and that

generated a net turnover of more than EUR 900 000 000 in the Union, in the

financial year preceding the last financial year preceding 26 July 2028, with the

exception of the measures necessary to comply with Article 16, which Member

States shall apply to those companies for financial years starting on or after 1 January

2029;

(c) from 26 July 2029 as regards all other companies referred to in Article 2(1), points

(a) and (b), and Article 2(2), points (a) and (b), and companies referred to in

Article 2(1), point (c), and Article 2(2), point (c), with the exception of the measures

necessary to comply with Article 16, which Member States shall apply to those

companies for financial years starting on or after 1 January 2030.’.

Article 3

Transposition

1. Member States shall bring into force the laws, regulations and administrative

provisions necessary to comply with this Directive by 31 December 2025 at the

latest. They shall forthwith communicate to the Commission the text of those

provisions.

When Member States adopt those provisions, they shall contain a reference to this

Directive or be accompanied by such a reference on the occasion of their official

publication. Member States shall determine how such reference is to be made.

2. Member States shall communicate to the Commission the text of the main provisions

of national law which they adopt in the field covered by this Directive.

EN 5 EN

Article 4

Entry into force

This Directive shall enter into force on the day following that of its publication in the Official

Journal of the European Union.

Article 5

Addressees

This Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament For the Council

The President The President

EN 6 EN

LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT

1. FRAMEWORK OF THE PROPOSAL/INITIATIVE ................................................. 3

1.1. Title of the proposal/initiative ...................................................................................... 3

1.2. Policy area(s) concerned .............................................................................................. 3

1.3. Objective(s) .................................................................................................................. 3

1.3.1. General objective(s) ..................................................................................................... 3

1.3.2. Specific objective(s) ..................................................................................................... 3

1.3.3. Expected result(s) and impact ...................................................................................... 3

1.3.4. Indicators of performance ............................................................................................ 3

1.4. The proposal/initiative relates to: ................................................................................. 4

1.5. Grounds for the proposal/initiative .............................................................................. 4

1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for

roll-out of the implementation of the initiative ............................................................ 4

1.5.2. Added value of EU involvement (it may result from different factors, e.g.

coordination gains, legal certainty, greater effectiveness or complementarities). For

the purposes of this section 'added value of EU involvement' is the value resulting

from EU action, that is additional to the value that would have been otherwise

created by Member States alone. ................................................................................. 4

1.5.3. Lessons learned from similar experiences in the past .................................................. 4

2. MANAGEMENT MEASURES................................................................................... 8

2.1. Monitoring and reporting rules .................................................................................... 8

2.2. Management and control system(s) ............................................................................. 8

2.2.1. Justification of the budget implementation method(s), the funding implementation

mechanism(s), the payment modalities and the control strategy proposed .................. 8

2.2.2. Information concerning the risks identified and the internal control system(s) set up

to mitigate them............................................................................................................ 8

2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio between

the control costs and the value of the related funds managed), and assessment of the

expected levels of risk of error (at payment & at closure) ........................................... 8

2.3. Measures to prevent fraud and irregularities ................................................................ 9

4. DIGITAL DIMENSIONS .......................................................................................... 29

4.1. Requirements of digital relevance .............................................................................. 30

4.2. Data ............................................................................................................................ 30

4.3. Digital solutions ......................................................................................................... 31

4.4. Interoperability assessment ........................................................................................ 31

4.5. Measures to support digital implementation .............................................................. 32

EN 7 EN

1. FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1. Title of the proposal/initiative

Proposal for a Directive of the European Parliament and of the Council amending

Directives (EU) 2022/2464 and (EU) 2024/1760 as regards certain corporate

sustainability reporting and due diligence requirements for undertakings.

1.2. Policy area(s) concerned

Capital Markets Union, Savings and Investment Union, European Green Deal,

Sustainable Finance Strategy, Company law and corporate governance

1.3. Objective(s)

1.3.1. General objective(s)

The general objectives pursued by this legislative proposal are to simplify and reduce

certain elements of Directive 2006/43/EC, Directive 2013/34EU, Directive (EU)

2022/2464 and Directive (EU) 2024/1760 in order to alleviate the reporting burden

on companies in scope of the requirements.

By reducing the administrative burden associated with reporting requirements and

compliance costs of sustainability reporting stemming from the above legislation,

this proposal intends to enhance the proportionality of the framework and the

competitiveness of European companies, while also maintaining the objectives of the

European Green Deal.

1.3.2. Specific objective(s)

The specific objectives of the proposed amendments to Directive (EU) 2022/2464

included in this proposal aim to achieve the following results:

– Postpone the sustainability reporting requirements on wave 2 and wave 3

companies by two years.

The specific objectives of the proposed amendments to Directive (EU) 2024/1760

included in this proposal aim to achieve the following results:

– Postpone the transposition deadline and the application of the sustainability due

diligence requirements for wave 1 companies by one year.

1.3.3. Expected result(s) and impact

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

The expected results and impact of the proposed amendments are to simplify

sustainability reporting requirements and as a result reduce the administrative burden

on companies in this regard, whilst maintaining the objectives of the European Green

Deal and the Sustainable Finance Action Plan. The proposed amendments are also

expected to result in significant cost savings for companies in scope when carrying

out sustainability reporting.

The amendments to Directive (EU) 2024/1760 included in this proposal are expected

to ease the compliance burden of companies as they will have more time to prepare

for compliance, adjust their policies, processes and procedures, also taking into

account the guidelines which the Commission will issue, allowing them to build on

best practices and reduce their reliance on legal counselling and advisory services.

EN 8 EN

1.3.4. Indicators of performance

Specify the indicators for monitoring progress and achievements.

The CSRD has been applied by a first set of companies who are publishing their first

sustainability statements mainly in the first half of 2025. It has therefore not been

possible to undertake an ex-post evaluation or fitness check of either piece of

legislation.

To monitor progress towards achieving the proposal’s specific objectives, the

Commission will explore the possibility of organising exchanges with stakeholders

in different formats as well as periodic surveys of users of sustainability information

and of undertakings that report such information, depending on the availability of

financial resources. Article 6 of the CSRD requires the Commission to present a

report on the implementation of the Directive by April 2029.

In this proposal, the Commission also commits to revising the first set of ESRS.

Under Directive 2013/34/EU, the Commission is required to review those

sustainability reporting standards, including the sustainability reporting standards for

small and medium-sized undertakings, every three years to take account of relevant

developments, including the development of international standards.

The implementation of the CSDDD as amended, and its effectiveness in reaching its

objectives, in particular in addressing adverse impacts, will also be subject to regular

evaluation according to Article 36 of that Directive.

A number of indicators will be used to monitor the progress of these proposals, such

as the effectiveness and timeliness of the actions proposed, the efficiency of

processes for collecting and processing data in accordance with the sustainability

reporting requirements, and the objective to limit administrative burden and avoid

unnecessary or duplicative reporting requirements.

1.4. The proposal/initiative relates to:

 a new action

 a new action following a pilot project / preparatory action26

 the extension of an existing action

 a merger or redirection of one or more actions towards another/a new action

1.5. Grounds for the proposal/initiative

1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for

roll-out of the implementation of the initiative

With this proposal, the Commission proposes a Directive amending Directives (EU)

2022/2464 and (EU) 2024/1760. Once the co-legislators will have reached an

agreement on the contents of the proposal, Member States will have a certain period

of time to transpose the amendments introduced by this Directive with respect to

postponing the date as from which certain groups of companies have to apply with

these Directives into their national law. Under this proposal, this transposition

deadline is set at 31 December 2025. This proposal also seeks to delay the

transposition deadline of the Directive (EU) 2024/1760 by one year. As a result,

26 As referred to in Article 58(2), point (a) or (b) of the Financial Regulation.

EN 9 EN

Member States would be required to transpose the CSDDD by 26 July 2027 at the

latest.

In a separate legislative proposal, the Commission proposes to amend a number of

provisions of Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU)

2024/1760. The Commission also proposes to revise Commission Delegated

Regulation (EU) 2023/2772 (European Sustainability Reporting Standards). The

Commission will adopt the revised ESRS delegated act in time for those

undertakings in the second wave that would be required to start reporting under the

CSRD in 2028 for financial year 2027 to apply the revised standards.

To monitor progress towards achieving the proposal’s specific objectives, the

Commission will explore the possibility of organising exchanges with stakeholders

in different formats as well as periodic surveys of users of sustainability information

and of undertakings that report such information, depending on the availability of

financial resources. Article 6 of the CSRD requires the Commission to present a

report on the implementation if the Directive by April 2029. The implementation of

the CSDDD as amended, and its effectiveness in reaching its objectives, in particular

in addressing adverse impacts, will also be subject to regular evaluation according to

Article 36 of that Directive. This proposal does not require an implementation plan.

1.5.2. Added value of EU involvement (it may result from different factors, e.g.

coordination gains, legal certainty, greater effectiveness or complementarities). For

the purposes of this section 'added value of EU involvement' is the value resulting

from EU action, that is additional to the value that would have been otherwise

created by Member States alone.

The Accounting Directive, as amended by the CSRD, already regulates the

disclosure of sustainability information in the EU. Common rules on sustainability

reporting and its assurance ensure a level playing field for companies established in

the different Member States. Significant differences in requirements for

sustainability reporting and assurance between Member States would create

additional costs and complexity for companies operating across borders, which

would be detrimental to the single market. Member States acting alone are not able to

modify existing EU laws to reduce the burden on companies.

Similarly, the CSDDD already sets out a harmonised regulatory framework for

corporate sustainability due diligence, and also covers certain third-country

companies active in the EU market, ensuring level playing field in this policy area.

1.5.3. Lessons learned from similar experiences in the past

N/A

1.5.4. Compatibility with the multiannual financial framework and possible synergies with

other appropriate instruments

N/A

1.5.5. Assessment of the different available financing options, including scope for

redeployment

N/A

EN 1 EN

3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

3.1. Heading(s) of the multiannual financial framework and expenditure budget

line(s) affected

N/A

4. DIGITAL DIMENSIONS

4.1. Requirements of digital relevance

The reporting requirements introduced by Directive 2013/34/EU require companies to

collect and report data concerning their impacts, risks and opportunities as regards material

sustainability matters. This exercise entails significant data identification, collection,

processing, verification and publication. In order to collect the relevant data, undertakings

often use digital data collection and data sharing platforms. Additionally, in order to store

and process the data for the purposes of sustainability reporting companies also often utilise

digital data management tools.

Users of sustainability information increasingly expect such information to be accessible,

comparable and machine-readable in digital formats. Member States must require that

undertakings subject to the sustainability reporting requirements of Directive 2013/34/EU

make their management reports available on their websites, free of charge to the public.

Digitalisation creates opportunities to exploit information more efficiently and holds the

potential for significant cost savings for both users and undertakings. Digitalisation also

enables the centralisation at Union and Member State level of data in an open and

accessible format that facilitates reading and allows for the comparison of data. These

requirements also complement the creation of a European single access point (ESAP) for

public corporate information.

As regards specific requirements within the Directive which are of digital relevance, please

see below.

Directive 2013/34/EU requires undertakings subject to sustainability reporting to prepare

their management report in the electronic reporting format specified in Article 3 of

Commission Delegated Regulation (EU) 2019/815 (ESEF Delegated Regulation). It also

requires these undertakings to mark up their sustainability reporting, including the

disclosures required by Article 8 of Regulation (EU) 2020/852, in accordance with the

digital taxonomy to be adopted by the Commission by way of an amendment to the ESEF

Delegated Regulation.

A digital taxonomy for the Union sustainability reporting standards will allow sustainability

reporting to be tagged and to be machine-readable. Until the adoption of this digital

taxonomy, undertakings are not required to mark-up their sustainability statements.

Considering that the sustainability statement will become machine-readable only once it is

both included in an XHTML document and marked-up with a digital taxonomy, pending

the adoption of the digital taxonomy undertakings are also

not required to prepare the management report in XHTML.

Stakeholders affected by these requirements include undertakings required to prepare and

publish a sustainability statement which has been digitally tagged and provided in an

XHTML format, as well as assurance providers who must verify that the sustainability

statement meets the necessary requirements.

EN 2 EN

The current proposal does not modify the existing digital tagging or format rules introduced

by the Corporate Sustainability Reporting Directive, which will enhance digital reporting

and enable the use of artificial intelligence in utilising the information that undertakings

report.

As regards the CSDDD, digital tools and technologies could support and reduce the cost of

data gathering and assessment. This proposal does not amend the relevant provisions of the

CSDDD.

4.2. Data

See section above.

4.3. Digital solutions

4.4. Interoperability assessment

4.5. Measures to support digital implementation

See section above.

N/A

To facilitate the smooth implementation of the requirements of digital relevance identified

in Section 4.1., the Commission is involved in a number of initiatives.

Firstly, a digital taxonomy for the Union sustainability reporting standards will be

necessary to allow the reported information to be tagged in accordance with those

sustainability reporting standards. The Commission will adopt a digital taxonomy for the

tagging of sustainability information via a Delegated Act, after having received technical

advice from ESMA.

Secondly, in the framework of the 2025 Technical Support Instrument round, the

Commission intends to launch a flagship multi-country project entitled "Improving

Sustainability Reporting for Businesses." This initiative aims to enhance the capacity of

Member States to support companies, particularly SMEs, in implementing CSRD and EU

Taxonomy reporting requirements. The support under this initiative will take into account

the evolution of the reporting requirements, and it will also be relevant for non-listed SMEs

that are not subject to mandatory reporting but face growing demands for sustainability

information from their financial and value chain partners.

Thirdly, EFRAG has launched an SME forum in which they bring together relevant

stakeholders of the SME community to discuss the implementation of the sustainability

reporting requirements and how digital solutions and tools can be used to facilitate

sustainability reporting for SMEs.

As regards the CSDDD, in order to help companies fulfil their due diligence obligations

along their value chain, the Directive encourages the use of digital tools and technologies

and requires the Commission to issue guidelines with useful information and references to

appropriate resources. This proposal does not amend the relevant provisions.