Certain corporate sustainability reporting and due diligence requirements: application dates

The European Parliament adopted by 531 votes to 69, with 17 abstentions, a legislative resolution on the 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.

Parliament supported the proposal, which is part of a first package of ‘Omnibus I’ measures on simplification aimed at strengthening the competitiveness of the European Union.

With a view to reducing the burden of reporting requirements and limiting the spill-over effect of these requirements on small businesses, the proposal provides for the postponement of the application dates of the new EU laws on due diligence and sustainability reporting.

Directive (EU) 2022/2464 on Corporate Sustainability Reporting (CSRD)

The proposal provides for a two-year postponement of the entry into force of the reporting requirements to which companies in the second wave (large companies that are not public interest entities and have more than 500 employees and large companies with fewer than 500 employees) and in the third wave (listed SMEs, small and non-complex credit institutions and captive insurance and reinsurance companies) will be subject.

Directive (EU) 2024/1760 on corporate sustainability due diligence (CSDDD)

Under the current rules, Member States should transpose the CSDDD by 26 July 2026 at the latest. It is expected that the entry into force will take place in three phases:

- from July 2027 , the rules should only start applying to the largest EU companies, i.e. those with more than 5 000 employees and an annual (worldwide) net turnover of more than EUR 1.5 billion, as well as to companies from third countries with a net turnover of more than EUR 1.5 billion in the EU;

- under the second wave, EU companies employing more than 3 000 people and achieving a net turnover of more than EUR 900 million, as well as companies from third countries achieving such net turnover in the EU, should comply with the new framework from July 2028;

- lastly, in July 2029 , all other companies falling within the general scope should start applying (the national rules transposing) the directive.

The proposal also provides for postponing by one year (until 26 July 2027) the transposition deadline for Member States.