Is sustain­ability reporting going to be simpli­fied?

With Omnibus I, the European Commission has presented initial proposals to reduce bureaucracy for companies and simplify European legislation. Making the European economy sustainable, prosperous and internationally competitive again is the aim of this initiative. The recommendations are based on the so-called Draghi Report (see News 09/2024). In order to promote growth and strengthen the competitiveness of the European Union (EU) in the long term, business-friendly framework conditions are to be created that will benefit companies throughout the EU.

Scope of appli­ca­tion decreases and rules are simpli­fied

The Corporate Sustainability Reporting Directive (CSRD) is one of the first initiatives to be focused on. Compared to its predecessor, the Non-Financial Disclosures Directive, the scope of application and the scope of reporting have been expanded. As part of efforts to make the European economy competitive again, the European Commission now wants to simplify the CSRD, which came into force two years ago. The scope of application is going to be narrowed to only cover companies with more than 1000 employees. This would exempt 80 per cent of companies. In addition, certain companies will not have to submit their reports until 2027 or 2028. Finally, it should be ensured that the requirements in the CSRD for large companies do not place a burden on smaller companies in the upstream value chains.

Reporting oblig­a­tions on occu­pa­tional acci­dents and diseases

As soon as the revision of the Directive has been completed, the European Commission will also be able to optimize the European Sustainability Reporting Standards (ESRS) that companies must observe. These also oblige companies to provide information on reportable and fatal work-related accidents and work-related illnesses. In addition, information on the proportion of employees for whom occupational health and safety management systems are in place must be disclosed. The aim is to create standardized, comparable and verifiable sustainability reporting for companies and organisations.

Preparations are already underway to reduce the number of parameters. The EU advisory body EFRAG (European Financial Reporting Advisory Group) is collecting input from relevant stakeholders until May 6.

What happens next?

The concrete modification of the ESRS can be tackled once the legislative procedure on the substantive amendments to the CSRD has been completed. As the committee responsible in the European Parliament will not adopt its report before mid-October, it is questionable whether work on the ESRS can begin before the end of this year.