On 11 July 2025, the European Commission (Commission) adopted targeted ‘quick fix’ amendments to the first set of European Sustainability Reporting Standards (ESRS).
The amendments are in the form of a Commission Delegated Regulation which amends Delegated Regulation (EU) 2023/2772 as regards the postponement of the date of application of the disclosure requirements for certain undertaking.
Background
The Corporate Sustainability Reporting Directive (CSRD) is currently scheduled to apply to large undertakings, SMEs with securities listed on regulated markets in the EU, parent undertakings of large groups, and to issuers that belong to those categories of undertakings. The date of application of the reporting requirements introduced by the CSRD is phased in, depending on the different categories of undertakings. In a first wave, large public interest entities with more than 500 employees must report for the first time in 2025 for financial year 2024 (‘wave one’ undertakings). In a second wave, other large undertakings must report in 2026 for financial year 2025 (‘wave two’ undertakings). In a third wave, SMEs with securities listed on regulated markets in the EU must report in 2027 for financial year 2026, although they have a possibility to opt out of reporting for financial years 2026 and 2027 (‘wave three’ undertakings). In a fourth wave, certain non-EU undertakings that have business in the territory of the EU above certain thresholds must report in 2029 for financial year 2028.
The Omnibus I package adopted by the Commission at the end of February 2025 included a separate legislative proposal which defers by two years the date by which Member States are to apply the measures necessary for wave two and wave three undertakings to comply with the CSRD reporting requirements. However, the package, as adopted, does not postpone the reporting requirements for wave one undertakings. Those undertakings are still required to report in 2025 information regarding financial year 2024.
Wave one undertakings with more than 750 employees also cannot benefit from the same phase-in provisions as other wave one undertakings and this may be considered contrary to the burden reduction imperative, especially in the case of those disclosure requirements in ESRS that are most challenging for undertakings. That refers in particular to the requirements for which the corresponding phase-in provision for undertakings with up to 750 employees applies for two years rather than just one year, that is to say the topical standards ESRS E4 (biodiversity and ecosystems), ESRS S2 (workers in the value chain), ESRS S3 (affected communities) and ESRS S4 (consumers and end-users).
Proposal
The adopted Delegated Regulation defers by two years the additional reporting requirements that wave one undertakings would otherwise have to meet for financial years 2025 and 2026, and extends to all wave one undertakings the phase-in provisions regarding ESRS E4 (biodiversity and ecosystems), ESRS S2 (workers in the value chain), ESRS S3 (affected communities) and ESRS S4 (consumers and end-users) that currently apply only to wave one undertakings with up to 750 employees. It also extends to all wave one undertakings the safeguard provision which provides that, where an undertaking uses those temporary exemptions for a complete topical standard, it must nevertheless report certain summarised information on the topic concerned if the undertaking has concluded that the topic in question is material.
Next steps
The draft Delegated Regulation enters into force on the third day following that of its publication in the Official Journal of the European Union.
It shall apply with respect to financial years beginning on or after 1 January 2025.