More delays to legislative sustainability in business measures have been announced this week when the European Parliament approved proposals to push the full-scale introduction of the Corporate Sustainability Reporting Directive back into 2026.

The delay has been issued as the European Union works to eke out a standardised approach to transparency which will govern how companies disclose their impacts and the metrics they will provide to do so.

The proposal to push the legislation back was made by the EU Commission in October 2023 as part of its 2024 Commission Work Programme which included scope to reduce reporting burdens for companies in the EU.

Within the postponement of the CSRD is a push back of the deadline for the adoption of sector-specific European Sustainability Reporting Standards (ESRS).

The first set of ESRS – which set out the rules and requirements for companies to report on sustainability-related impacts, opportunities, and risks, came into force in January 2024. A full-scale introduction of CSRD and subsequent, sector-specific ESRS were scheduled for a 2024 launch.

However, the European Parliament has since approved the proposal to postpone the adoption of these incoming regulations to allow companies to focus on implementing the first set of ESRS and to limit reporting while also giving the European Financial Reporting Advisory Group (EFRAG) more time to develop the new standards.

With further discussion to take place, the push back means privately held corporation – as well as publicly traded organisations (including those trading with EU countries from outside of Europe) must now await updates.

The Corporate Sustainability Reporting Directive is meant to be a method of standardisation to compare and contrast the actions of businesses by setting criteria designed to put them – steadily- on the pathway to net zero alongside a greater contribution to social causes. The Directive currently applies to businesses that previously adhered to the Non-Financial Reporting Directive which has applied to certain corporations since January 2023.

Companies from outside the EU must now await clarification on how they will be expected to disclose ESG in order to do business with EU member countries when the legislation does eventually come into action now in 2026.

European Parliament’s rapporteur, Axel Voss, said: “We will delay the deadline for sector specific standards under the Corporate Sustainability Reporting Directive (CSRD) by two years in order to give EFRAG the time to develop quality standards and give companies the time to put them into practice. Companies have been putting up with too much bureaucracy in years of crisis, from Covid to inflation.”