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
Date: 2025-02-26
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: activity report, corporate social responsibility, disclosure of information, environmental impact, large business, small and medium-sized enterprises, standard, sustainable development, trade information

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}  
 
 
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 
(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 ‘Action Plan: Financing Sustainable Growth’, COM/2018/097 final. 

Directive  (EU)  2022/2464  of  the  European  Parliament  and  of  the  Council  of  14  December  2022 

the  Commission,  ‘The  European  Green  Deal,  COM(2019)  640  final.  

Communication  from 

EN 

1 

  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 
10 
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 

As well as the other parent undertakings of large groups, for consolidated sustainability reporting. 
Small and non-complex credit institutions, and captive insurance and reinsurance undertakings, are also 

EN 

2 

  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 

EFRAG was previously called the European Financial Reporting Advisory Group but its official name 

Commission  Delegated  Regulation  (EU)  2023/2772  of  31  July  2023  supplementing  Directive 

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 
2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards. 
13 
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 

3 

  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 

4 

  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. 

invites  co-legislators 

The  Commission 
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.  

to  reach  rapid  agreement  on 

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

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

EN 

5 

  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 

6 

  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 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

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 
the 
timely guidance 

inconsistencies 

overlaps 

remove 

and 

and 

in 

to 

EN 

7 

  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 

8 

  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 

9 

  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 

10 

  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 

11 

  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 
19 

20 

21 

OJ C […], […], p. […]. 
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. 
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). 
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 

1 

  EN 

 
 
(3) 

(4) 

22 

23 

24 

25 

the  Council,  to  achieve  those  objectives,  whilst  maintaining  the  policy  objectives  of 
the Green Deal22 and the Sustainable Finance Action Plan23.  

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. 

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 

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. 
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. 
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). 
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 

2 

  EN 

 
 
initiatives  aiming  at  simplifying  certain  existing 
the  ongoing  Commission’s 
the  undertakings’  related 
sustainability  reporting  obligations  and 
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.  

to  reduce 

(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) 

(8) 

(9) 

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. 

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

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 

3 

  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) 

(b) 

(c) 

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; 

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; 

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 

4 

  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 
The President 

For the Council 
The President 

EN 

5 

  EN 

 
 
 
LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT 

1. 

1.1. 

1.2. 

1.3. 

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

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

Policy area(s) concerned .............................................................................................. 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. 

1.5. 

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

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. 

2.1. 

2.2. 

2.2.1. 

2.2.2. 

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

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

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

Justification of the budget implementation method(s), the funding implementation 
mechanism(s), the payment modalities and the control strategy proposed .................. 8 

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. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

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

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

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

Data ............................................................................................................................ 30 

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

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

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

EN 

6 

  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 

7 

  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 

8 

  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 
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.   

requirements 

in 

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 

9 

  EN 

 
3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

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 

1 

  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 

See section above.  

4.4. 

Interoperability assessment 

N/A 

4.5.  Measures to support digital implementation 

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. 

EN 

2 

  EN