The EU’s Omnibus proposal has shaken up the sustainability world and there’s no shortage of opinions and interpretations floating around. Across the coverage and commentary I’ve seen, a common refrain emerges: “CSRD reporting is delayed by two years.”
This is not entirely true.
The Omnibus proposal delays wave 2 and wave 3 reporting by two years, it does not freeze reporting for those already required to report in 2025. A recent Ropes & Gray memo speaks to this point:
“The Commission is proposing to postpone by two years the reporting requirements for fiscal year 2025 and fiscal year 2026 first-time reporters (the second and third waves of reporters). This would mean that most U.S.-based multinationals – which are second wave reporters – would begin reporting starting with fiscal 2027. The Commission has not proposed delaying non-EU parent undertaking reporting. The Commission also has not proposed modifying the reporting deadline for fiscal year 2024 reporters”
Note that the fiscal year 2025 and 2026 delays only apply to first-time reporters. For those required to report on fiscal year 2024, reporting will continue.
Additionally, the delays are not yet law – they are still in the proposal stage. The European Commission is hoping to “fast-track” the reporting delays by introducing them in a separate priority proposal parallel to the Omnibus. The hope is that second and third-wave companies that are out of scope under Omnibus will get more immediate relief. Potentially avoiding a situation where a company is required to report in 2026 only to be out of scope by 2027. However, neither the Omnibus nor the delay proposal are law yet, and both must become law before any delays or new scoping requirements apply. Just how quickly the EU can approve the delay proposal will boil down to politics and there are no guarantees that the political environment will allow the proposal to be “fast-tracked.”
Adding to the potential unknowns is the regulatory position of national authorities. Assuming the delay proposal and omnibus don’t become law in time to delay wave 2 reporting, will national authorities choose to enforce against non-compliant companies that may end up out of scope? The uncertainty introduced by the Omnibus and delay proposals puts companies in a delicate position. Companies don’t want to spend money on extensive reporting if they aren’t going to be in scope. On the other hand, companies may need to be prepared for a future where scoping requirements and deadlines don’t change quickly enough. We are monitoring the situation and will keep you up to date.
Our members can learn more about CSRD reporting here.
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