Sustainability Reporting
SUSTAINABILITY REPORTING HUB
Our Sustainability Reporting Hub is a resource setting out legislation and guidance in relation to the CSRD, EU Taxonomy Regulation and CSDDD.
OMNIBUS PACKAGE: PROPOSED AMENDMENTS TO CSRD AND CSDDD
On 26 February, the European Commission published an ‘Omnibus’ package, including proposals to simplify obligations under the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD):
- postponing application of aspects of the CSRD and CSDDD - the "stop the clock" proposal; and
- amending obligations under the CSRD and CSDDD - the "amendments" proposal.
Both proposals take the form of draft directives which, if adopted, will require transposition into Irish law.
Stop the Clock
The “stop the clock” proposal postpones CSRD reporting by two years for companies due to report in 2026 (in respect of financial years commencing on or after 1 January 2025) and 2027 (in respect of financial years commencing on or after 1 January 2026) and postpones transposition and first application of the CSDDD by one year. There is no proposed postponement of CSRD reporting for "wave 1" companies (currently reporting in 2025 on FY 2024 data).
Amendments to CSRD and CSDDD
A second proposal sets out amendments to the reporting, due diligence and climate transition plan obligations under the CSRD and CSDDD. Key proposed amendments include:
- CSRD Scope - confining application to large companies/groups with more than 1,000 employees (and either a turnover above EUR 50 million or a balance sheet total above EUR 25 million).
- Non-EU Companies - the EU net turnover threshold for non-EU companies is increased (from EUR 150 million) to EUR 450 million.
- Article 8 Taxonomy Disclosures - where a company has a net turnover of EUR 450 million or less, Taxonomy reporting will be voluntary, unless the company claims to have Taxonomy-aligned activities.
- Value Chain Cap – a limit on the information that reporting companies can request from entities within their value chains with fewer than 1,000 employees.
- Climate Transition Plan - the requirement under the CSDDD to “put into effect” a climate transition plan is replaced with a requirement to include implementation actions.
- Limited Due Diligence – CSDDD due diligence obligations would generally be limited to direct business relationships, with diligence updates required every 5 years and removal of the obligation to terminate a business relationship as last resort.
ESRS
The European Commission has committed to a revision of the current set of ESRS, including a significant reduction in the number of mandatory data points. The revised ESRS are to be adopted, at the latest, six months after the entry into force of the "amendments" directive. It is anticipated that exposure drafts of the revised ESRS may be available sooner.
The "amendments" proposal also removes the mandate for sector-specific ESRS.
The requirement to report from a double materiality perspective will be retained.
Next Steps and Timing
The proposals have been submitted to the European Parliament and Council for consideration and adoption.
The Council approved the “stop the clock proposal” on 26 March and the European Parliament is scheduled to vote on the urgent procedure for this proposal on 1 April 2025. Both the Commission and the European Council have called for the co-legislators to reach an agreement on the “stop-the-clock” proposal by June 2025. If adopted as currently drafted, the amendments to the dates of application will need to be transposed by Member States by 31 December 2025.
The "amendments" proposal, which is expected to follow the ordinary EU legislative process, is likely to take longer, particularly if further amendments are proposed by the Parliament or Council.
For more on the proposed amendments, see our recent Insights: Omnibus Package: Proposed Amendments to CSRD and CSDDD.
HORIZON SCANNING: KEY DATES
28 March 2025
Conditions and procedures for authorised CBAM declarants apply.
31 December 2025
Proposed transposition deadline for “stop the clock” amendments to CSRD and CSDDD.
1 January 2026
Amendments to Taxonomy Delegated Acts apply.
1 January 2026
CBAM fully applicable.
EU TAXONOMY: PROPOSALS TO SIMPLIFY REPORTING
Alongside the Omnibus Package, the European Commission published a call for evidence on a draft Delegated Act setting out proposed amendments to the Taxonomy Disclosures Delegated Act, Taxonomy Climate Delegated Act and Taxonomy Environmental Delegated Act aimed at simplifying and improving the Taxonomy reporting framework.
Proposed amendments to the Taxonomy Disclosures Delegated Act include the introduction of a de minimis threshold and simplified reporting templates resulting in a reduction of reported data points. The Commission is also proposing to simplify the most complex “do no significant harm” (DNSH) criteria for pollution prevention and control related to the use and presence of chemicals that apply horizontally to all economic sectors under the EU Taxonomy.
The consultation closed on 26 March 2025. The European Commission intends to adopt the Delegated Act by June 2025 to apply from 1 January 2026.
EU TAXONOMY: FAQ GUIDANCE
On 5 March 2025, the European Commission published final form FAQ Guidance providing technical explanations on various aspects of the EU Taxonomy Regulation including on the application of general requirements, technical screening criteria for specific activities outlined in the Climate and Environmental Delegated Acts, and the generic DNSH criteria for climate change adaptation, pollution prevention and control and protection and restoration of biodiversity and ecosystems. The FAQ were previously published in draft form in November 2024.
CBAM UPDATES
The EU Carbon Border Adjustment Mechanism (CBAM) Regulation applies to certain goods being imported into the EU. Products currently within scope of the CBAM are listed in Annex I of the CBAM Regulation and fall into categories of cement, iron and steel, aluminium, fertiliser, and electricity and hydrogen. The CBAM is designed to apply the same carbon costs to those goods as would have been incurred had they been produced in the EU. Transitional reporting obligations have applied since 1 October 2023 and run until 31 December 2025 with the CBAM applying in full from 1 January 2026.
Proposed Revision
As part of the Omnibus package, the European Commission published a proposal to simplify the CBAM.
A key proposed amendment is the introduction of a de minimis threshold, which would exempt importers of smaller quantities of CBAM goods. It is proposed that the exemption would apply where goods do not exceed 50 tonnes (cumulatively per calendar year). The de minimis threshold would not apply to electricity and hydrogen.
Other proposed changes aim to simplify obligations in relation to authorisation of declarants, data collection from producers outside the EU, calculation of embedded emissions, emissions verification rules, and calculation of declarants’ financial liability. The date from which authorised CBAM declarants are required to obtain CBAM certificates would be postponed by one year to February 2027 (in respect of liabilities accrued from the beginning of 2026).
Authorised CBAM Declarants
The European Commission has published an implementing regulation, setting out conditions and procedures related to the status of authorised CBMA declarants, which applies from 28 March 2025.
For more see our recent Insights: Omnibus Package: Revision of the Carbon Border Adjustment Mechanism and New Rules indicate Lead-in Time to obtain Authorised CBAM Declarant Status.