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Posted: July 14, 2025
The European Union has delayed new sustainability reporting rules for large companies by two years, easing regulatory pressure as it reworks its Corporate Sustainability Reporting Directive. The move aims to reduce data requirements and shift compliance timelines while the directive undergoes major revision.
In a move aimed at easing regulatory pressure, the European Commission has postponed additional sustainability reporting requirements for large companies by two years. These updates, originally scheduled under the Corporate Sustainability Reporting Directive (CSRD), included disclosures on biodiversity, Scope 3 emissions, and workers in the value chain. This delay is part of the EU’s broader Omnibus I package, which seeks to simplify the regulatory framework and lessen the administrative burden on businesses already navigating early CSRD compliance.
The CSRD, which came into effect in 2024, introduced robust reporting obligations focused on environmental and social impacts, as well as sustainability risks. Initially, the directive applied to large public-interest companies with over 500 employees, with plans to expand coverage to companies with more than 250 employees and eventually to listed SMEs. However, the Omnibus initiative may dramatically shift the landscape. Proposed changes could raise the reporting threshold to companies with over 1,000 employees and reduce data requirements by up to two-thirds, according to the European Financial Reporting Advisory Group (EFRAG).
These new amendments mean that companies already in the first reporting wave will not have to include additional disclosures that were previously planned for later years. Firms with fewer than 750 employees can now defer reporting on biodiversity, Scope 3 emissions, and several workforce-related topics through 2026. Larger companies also gain reprieve from most of these disclosures, except Scope 3, until that same year. Meanwhile, smaller companies scheduled to start reporting in 2026 and 2027 are also receiving a temporary pause, with the full review of the ESRS expected to wrap up by 2027.
