The European Parliament today voted to postpone the application of the corporate sustainability due diligence directive (CSDDD) and the corporate sustainability reporting directive (CSRD), with final approval now required from the European Council.
The European Parliament has backed some of the key proposals from the European Commission's omnibus package submitted in February, which aims to delay the start of due diligence and sustainability reporting requirements by one and two years, respectively.
The CSDDD would require large firms to adopt plans to mitigate their climate impact, keeping global temperatures within 1.5°C of pre-industrial levels, as per the Paris climate agreement. Under the new proposals, member states have until July 2027 to transpose the rules into national legislation, with the first wave of affected business required to be compliant from 2028.
The CSRD came into force at the beginning of 2024, introducing mandatory climate and energy disclosures for some businesses. The use of certificates such as guarantees of origin and renewable power purchase agreements are the only ways recognised in the original text to document use of renewable energy. February's omnibus package sought to delay the start of reporting for companies with more than 250 employees as well as small and medium-sized enterprises by two years to 2028 and 2029, respectively.
The next step in the legislative process requires formal approval from the European Council, which already indicated an agreement in an initial position adopted on 26 March.
In addition to delaying the application dates, the commission is also seeking to amend the content and scope of both directives. Notably, for sustainability reporting, the changes would see 80pc of companies falling outside the initial scope.
