Recently, two very important proposals, the CSRD and the CSDDD (CS3D), have been updated. Have a read to find out what has changed!
CSRD
For most companies, the CSRD remains relatively unchanged, as the amendments only affect sector-specific companies and non-EU parent companies. Therefore, all companies that fall under the scope of the CSRD are advised to stay focused on meeting the reporting requirements within the already established framework.
The two updates are:
1) On the 7th of February 2024, the European Parliament and Council reached an agreement on the proposal by the European Commission to delay certain adoption timelines of the CSRD. This request postpones certain obligations for companies in most polluting industries (such as oil and gas, food, agriculture and textiles) to disclose sector-specific sustainability data. This delay gives these companies more time to get their broader CSRD reporting processes in place. In addition to this, it also gives the European Financial Advisory Group (EFRAG), which writes the CSRD's reporting framework, more time to write standards that are more tailored to each industry.
Regardless of this delay, all companies that fall under the scope of the CSRD, including those most polluting industries, must still comply with the general European Sustainability Reporting Standards (ESRS), which came into force this year as part of the CSRD.
2) An extended timeline for ‘Reduced’ ESRS standards for Non-EU parent companies, standards for non-EU parent companies with subsidiaries in the EU (‘reduced’ standards) will be released in 2026 instead of 2024. This means that certain EU subsidiaries of these companies may fall within scope for 2026, thus diminishing the ‘relief’ provided by the extended deadline for these parent companies.
CS3D
After weeks of uncertainty, the CSDDD (CS3D) is set to pass into law. On friday the 15th of March, EU member states voted in favour of the proposal.
In December of 2023, the EU institutions agreed on the ‘final’ version of the proposal for the directive. However, the future of the law became uncertain due to last-minute hesitations from Germany and Italy. Throughout the past two weeks, Belgium, the chair of the EU council, has worked to address the concerns over excessive bureaucracy. As a result, the threshold determining which companies the law will be applied to, has tripled to a worldwide turnoverof €450 million. This change, as they state, was necessary to overcome deadlock. Furthermore,in the latest draft, civil liability provisions have also been removed, which used to allow trade unions to sue non-compliant firms. On friday the 15th of March, Italy has approved this stripped-down version of the law and as of now it is likely these measures will go into force.
However, the new rules still require approval from MEP’s. With the elections coming up in June, April is the final opportunity to vote about this.
Despite these changes in the CSRD and CS3D, we urge you to get embark on your compliance journey and start with collecting verified data now.
Get in touch via hello@tex-tracer.com to find out more about how our platform helps in automating data collection.
