EU's Sustainability Reporting Rules: Delays and Revisions Unfold

The EU is negotiating changes to exempt smaller businesses from sustainability reporting, responding to industry concerns. The rules for firms under 500 employees are delayed until 2027, while supply chain laws are postponed to 2028. Industry backs simplifications, but critics warn of diminished corporate accountability.

European Union politicians are granting themselves more time to modify sustainability reporting rules that could exempt smaller businesses, amidst concerns from the European industry about competitive disadvantages.

To address industry complaints, the European Commission proposed the 'Simplification Omnibus,' which seeks to relieve thousands of smaller European businesses from sustainability reporting rules that their competitors in China and the United States aren't subjected to. The proposal now awaits negotiation between the European Parliament and member states, a procedure that often spans over a year.

This development has led the Parliament to postpone existing reporting obligations for most companies by two years, giving firms under 500 employees a break until 2027. Bigger firms, however, will have to comply with the reporting mandates this year. Critics, including investors and campaigners, express concerns over diminished accountability and the creation of an unstable legislative environment.

(With inputs from agencies.)