Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings
Date: 2023-10-17
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: administrative formalities, closing of accounts, corporate social responsibility, disclosure of information, exchange of information, publication of accounts, sustainable development, technical standard, third country, trade information

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   EUROPEAN COMMISSION  Brussels, 17.10.2023  COM(2023) 596 final 2023/0368 (COD)  Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings (Text with EEA relevance)  
 
EXPLANATORY MEMORANDUM 

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CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

In its Communication on ‘Long-term competitiveness of the EU: looking beyond 2030’, the 
Commission  has  stressed  the  importance  of  a  regulatory  system  that  ensures  that  objectives 
are  reached  at  minimum  costs.  It  has  committed therefore to  a fresh push to  rationalise and 
simplify  reporting  requirements,  with  the  ultimate  aim  to  reduce  such  burdens  by  25%, 
without undermining the related policy objectives.  

Reporting  requirements  play  a  key  role  in  ensuring  correct  enforcement  and  proper 
monitoring  of  legislation.  Their  costs  are  overall  largely  offset  by  the  benefit  they  bring,  in 
particular  in  monitoring  and  ensuring  compliance  with  key  policy  measures.  Reporting 
requirements can however also impose disproportionate burdens on stakeholders, particularly 
affecting SMEs and micro-companies. Companies therefore should be given sufficient time to 
prepare for  any new  reporting requirements.  The cumulation of reporting requirements  over 
time  can  result  in  redundant,  duplicating  or  obsolete  obligations,  inefficient  frequency  and 
timing, or inadequate methods of collection.  

Streamlining reporting obligations and reducing administrative burdens is therefore a priority. 
In this context, the proposal will rationalise reporting obligations by postponing the adoption 
deadline for sustainability reporting standards for certain sectors and for certain third country 
undertakings.  
The  Accounting  Directive  (2013/34/EU)1  as  amended  by  the  Corporate  Sustainability 
Reporting  Directive  (CSRD  -  2022/2464)2  requires  large  companies  and  listed  small  and 
medium-sized companies (SMEs), as well as parent companies of large groups, to include in a 
dedicated  section  of  their  management  report  the  information  necessary  to  understand  the 
company’s  impacts  on  sustainability  matters,  and  the  information  necessary  to  understand 
how sustainability matters affect the company’s development, performance and position.3 

This sustainability information must be reported in accordance with European Sustainability 
Reporting Standards (ESRS), to be adopted by the Commission by means of delegated acts, 
taking  into  consideration  the  technical  advice  provided  by  EFRAG4.  These  ESRS  must 
specify the content and, where relevant, the structure to be used to present that information.5  

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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). 
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). 
The  sustainability reporting requirements for large undertakings and listed SMEs are set out in Articles 
19a and 29a of the Accounting Directive, and apply from financial year 2024 depending on the category 
of undertaking. Article 40a of the Accounting Directive also requires certain non-EU companies carrying 
out business in the territory of the Union to make public certain sustainability information from financial 
year 2028.    
Article  49(3b)  Accounting  Directive.  EFRAG  was  previously  called  the  European  Financial  Reporting 
Advisory Group. In 2022 it changed its name to simply EFRAG.  
Article  29b(1)  of  the  Accounting  Directive  mandates  the  Commission  to  adopt  via  delegated  acts  the 
ESRS to be used by large undertakings and listed SMEs, while Article 40b mandates the Commission to 
adopt the ESRS for the sustainability report of certain non-EU companies.  

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A first set of ESRS was adopted by the Commission on 31 July 2023 and is now subject to the 
scrutiny of the European Parliament and of the Council. The ESRS in this first set are sector-
agnostic, meaning that they apply to all undertakings under the scope of the CSRD, regardless 
of which sector or sectors the undertaking operates in. 

Article 29b(1), third subparagraph, of the Accounting Directive sets the adoption date of the 
sector  specific  ESRS  by  30  June  2024.  These  ESRS  are  to  specify  the  information  that 
undertakings  should  report  about  sustainability  matters  and  reporting  areas  specific  to  the 
sector in which an undertaking operates.  

The  Commission  is  putting  forward  concrete  proposals  to  reduce  the  reporting  burden  for 
financial market participants. One of them is to propose a 2-year delay of the date of adoption 
of the sector-specific ESRS, currently required in 2024. This also responds to a demand from 
the corporate sector.  

Postponing the adoption date by 2 years is relevant for companies in the scope of the CSRD, 
including  listed  SMEs,  required  to  carry  out  sustainability  reporting.  This  will  allow  these 
companies to focus on the implementation of the first set of ESRS adopted on 31 July 2023, 
ensure that EFRAG has time to develop sector specific ESRS that are efficient, and limit the 
reporting requirements to the minimum necessary.   

In addition, Article 40b of the Accounting Directive sets the adoption date for the ESRS to be 
used by certain non-EU companies with business in the Union by 30 June 2024. Considering 
that the reporting requirements for these non-EU companies only applies from financial year 
2028,  and  considering  the  2-year  postponement  of  the  deadline  for  adopting  the  sector-
specific ESRS, the adoption deadline for these standards should also be postponed by 2 years. 
This  will  allow  more  resources  to  be  dedicated  to  the  development  of  effective  and 
proportionate  sector-specific  ESRS,  while  still  giving  enough  time  for  these  non-EU 
companies to prepare ahead of financial year 2028.  

• 

Consistency with existing policy provisions in the policy area 

The proposal is part of a first package of measures to rationalise reporting requirements. This 
is a step in a process looking comprehensively at existing reporting requirements, with a view 
to  assess  their  continued  relevance  and  to  make  them  more  efficient.  The  rationalisation 
introduced by this measure will not negatively affect the achievement of the objectives in the 
area of sustainability reporting. The proposal is also consistent with the SME Relief Package.6  

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N/A 

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Consistency with other Union policies 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 50 TFEU has been determined to be the appropriate legal basis for this initiative since 
it amends an existing Directive, which is based on that Article. 

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COM(2023) 535 final. 

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Subsidiarity  

The deadlines for the adoption of the sustainability reporting standards are to be met by the 
Commission.  Postponing  these  deadlines  can  only  be  done  by  way  of  an  act  of  the  co-
legislators. No action at national level is required in this regard.  

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Proportionality 

This  initiative  has  the  primary  objective  of  allowing  companies  to  focus  on  the 
implementation  of  the  first  set  of  ESRS  adopted  on  31  July  2023,  ensure  that  EFRAG  has 
time to  develop  sectoral ESRS that are efficient,  and limit the reporting requirements to  the 
minimum  necessary.  Postponing  the  deadlines  for  the  adoption  by  the  Commission  of  the 
sustainability  reporting  standards  for  certain  sectors  -  as  well  as  for  certain  third-country 
companies  -  would  achieve  this  objective  while  leaving  sufficient  time  for  companies  to 
prepare for these additional reporting requirements.  

• 

Choice of the instrument 

Considering  that  the  amendments  only  concern  the  postponement  of  time  limits  for  the 
Commission to adopt delegated acts, therefore not requiring any transposition by the Member 
States, a Decision of the European Parliament and of the Council adopted in compliance with 
the  procedure  set  out  in  Article  50(1)  TFEU  is  deemed  to  be  the  most  appropriate  legal 
instrument.  Indeed,  this  instrument  is  about  the  overall  normative  context  within  which 
Member  States  are  called  to  approximate  their  laws  through  the  Directive,  as  required  by 
Article 50 TFEU.  

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

Stakeholder consultations 

Collection and use of expertise 

Impact assessment 

Regulatory fitness and simplification 

Fundamental rights 

3. 

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4. 

BUDGETARY IMPLICATIONS 

This initiative has no budgetary implications.  

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OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

5. 

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N/A 

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Explanatory documents  

No  transposition  by  Member  States  is  required  since  this  initiative  postpones  by  2  years 
certain deadlines for the Commission to adopt delegated acts.  

• 

Detailed explanation of the specific provisions of the proposal 

Directive 2013/34/EU is amended as follows: 

(1) 

(2) 

The deadline for the Commission to adopt sector-specific ESRS by way of delegated 
acts under Article 29b(1), third subparagraph, is set by 30  June 2026 (instead of by 
30 June 2024); 

The  deadline  for  the  Commission  to  adopt  ESRS  for  non-EU  companies  meeting 
certain thresholds by way of delegated acts under Article 40b is set by 30 June 2026 
(instead of by 30 June 2024).  

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2023/0368 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Directive 2013/34/EU as regards the time limits for the adoption of 
sustainability reporting standards for certain sectors and for certain third-country 
undertakings 

(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 
Article 50(1) 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 Committee7,  

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

Sustainability reporting requirements play a key role in ensuring market transparency 
and in ensuring that undertakings are accountable for their impacts on people and the 
environment.  However,  it  is  important  to  streamline  those  requirements,  in  order  to 
ensure  that  they  fulfil  the  purpose  for  which  they  were  intended  and  to  limit  the 
administrative burden.  

Article  29b(1),  third  subparagraph,  of  Directive  2013/34/EU  of  the  European 
Parliament and of the Council8 requires the Commission to provide for sustainability 
reporting  standards  by  means  of  delegated  acts  by  30  June  2024  specifying  the 
information that undertakings are to report with regard to sustainability matters and the 
reporting areas specific to the sector in which an undertaking operates, in addition to 
the information that undertakings are already to provide under Commission Delegated 
Regulation (EU) XX/XXX9.  

(3) 

To  reduce  the  reporting  burden  on  undertakings,  as  set  out  in  the  Commission 
Communication  on  ‘Long-term  competitiveness  of  the  EU:  looking  beyond  2030’10, 
undertakings should be allowed to focus first on the  implementation of sustainability 

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OJ C […], […], p. […]. 
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). 
[Publications  office,  please  insert  the  full  reference  to  this  Delegated  Act,  once  published: 
COMMISSION  DELEGATED  REGULATION  (EU)  …/…  of  31.7.2023  supplementing  Directive 
2013/34/EU  of  the  European  Parliament  and  of  the  Council  as  regards  sustainability  reporting 
standards (C(2023) 5303 final)]. 
COM(2023)168. 

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(4) 

(5) 

reporting  requirements  laid  down  in  Delegated  Regulation  (EU)  XX/XXX.  For  that 
reason,  the  time  limit  for  the  adoption  of  the  delegated  acts  containing  the 
complementary  sustainability  reporting  requirements  referred  to  in  Article  29b(1), 
third subparagraph, of Directive 2013/34/EU should be postponed by 2 years. 

Article  40b  of  Directive  2013/34/EU  also  requires  the  Commission  to  adopt,  by  30 
June 2024, a delegated act to provide for sustainability reporting standards to be used 
for the disclosure of sustainability information concerning third-country undertakings 
with a net turnover above EUR 150 million and with either subsidiaries in the Union 
that  are  large  undertakings  or  small  and  medium-sized  undertakings  with  securities 
admitted to trading in the Union regulated markets, or with branches in the Union with 
a net turnover above EUR 40 million. 

The  reporting  requirements  for  certain  third-country  undertakings  only  apply  as  of 
financial  year  2028.  Since  the  time  limit  for  the  adoption  of  the  delegated  acts 
containing  the  complementary  sustainability  reporting  obligations  referred  to  in 
Article  29b(1),  third  subparagraph,  of  Directive  2013/34/EU  will  be  postponed  by  2 
years,  the  time  limit  for  the  adoption  of  the  sustainability  reporting  standards  for 
certain third-country undertakings standards should also be postponed by 2 years.   

(6) 

Directive 2013/34/EU should therefore be amended accordingly, 

HAVE ADOPTED THIS DECISION:  

Article 1 

Directive 2013/34/EU is amended as follows: 

Amendments to Directive 2013/34/EU 

(1) 

In  Article  29b(1),  third  subparagraph,  introductory  wording,  ‘30  June  2024’  is 
replaced by ‘30 June 2026’; 

(2) 

in Article 40b, ‘30 June 2024’ is replaced by ‘30 June 2026’. 

Article 2 

Entry into force 

This Decision shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union.  

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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