Client Alert: EU Reporting Requirements May Become Less Stringent 

/ KERAMIDA Inc./

On Wednesday, February 26, the European Commission released the Simplification Omnibus, a set of proposed amendments to the European Green New Deal in response to criticism from EU businesses. This legislative package suggests changes to the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy and Carbon Border Adjustment Mechanism (CBAM), among others. These proposals must be approved by the European Parliament and EU member states before they can be implemented. Below is a summary of the key changes proposed in the package.

Corporate Sustainability Reporting Directive (CSRD)

  • Scope Reduction: The threshold for mandatory sustainability reporting will rise from companies with over 250 employees to those with more than 1,000 employees. This change would exempt around 80% of companies that were previously subject to the directive.

  • Reduced Value Chain Reporting: The Commission has proposed reducing the compliance burden for small and medium-sized enterprises (SMEs) when they are asked to provide data to a larger company under the scope of the CSRD.

  • Implementation Delay: The deadline for the first companies to report would be been postponed to mid-2028.

Corporate Sustainability Due Diligence Directive (CSDDD)

  • Scope Reduction: Due diligence obligations for in-scope companies would be only required for direct business partners.

  • Assessment Frequency Change: Companies within the scope would need to assess their supply chains every five years instead of every year.

  • Implementation Delay: The deadline for the first companies to report would be been postponed to mid-2028.

EU Taxonomy and Carbon Border Adjustment Mechanism (CBAM)

  • Reduced Scope: Only companies that import important goods weighing more than 50 metric tons would be included, reducing the number of relevant companies from 200,000 to roughly 18,000.

Experts from KERAMIDA’s Corporate Sustainability Practice will closely monitor the legislation and provide clients with updates as we receive them. To speak with one of our professionals about how these updates may impact your business, please reach out to our team.

Contact

Anisa Chowdhury, CPA, CA
Vice President, Corporate Sustainability & Assurance
KERAMIDA Inc.

Contact Anisa at: achowdhury@keramida.com