The European Commission has announced a significant delay to the rollout of sustainability reporting requirements for non-EU companies under the Corporate Sustainability Reporting Directive (CSRD), extending the timeline to at least October 2027. The move is part of the EU’s broader “simplification agenda” to reduce regulatory burdens and streamline over 100 pending legislative acts [1].

Initially expected by mid-2024, the European Sustainability Reporting Standards (ESRS) for non-EU entities had already been postponed once to 2026. The latest delay pushes adoption even further, effectively pausing one of the EU’s key mechanisms for global corporate sustainability disclosure [1]. The standards would have required large foreign companies with over €150 million in EU turnover to begin reporting from 2028, using a dedicated ESRS framework for third-country undertakings [1].

The Commission said the decision aims to balance environmental goals with competitiveness, amid mounting pressure from businesses and political leaders to ease regulatory demands during a period of slower economic growth [1]. The postponement also aligns with ongoing transatlantic negotiations with the United States, following concerns from U.S. companies that the CSRD’s extraterritorial reach could impose excessive compliance costs [1].

At the same time, the European Parliament is moving to pare back the scope of another major ESG regulation, the Corporate Sustainability Due Diligence Directive (CSDDD). Lawmakers from the European People’s Party (EPP), along with socialist and liberal groups, agreed on a compromise to limit the law’s coverage to companies with at least 5,000 employees and €1.5 billion in turnover, up from 1,000 employees and €450 million previously [2].

Jorgen Warborn, the EPP lawmaker leading the negotiations, said the revised approach focuses on restoring European growth and job creation [2]. The changes follow pushback from Germany, France, and multinational corporations including ExxonMobil, which argued that complex sustainability laws could undermine business competitiveness [2].

Critics warn, however, that the EU’s recent regulatory retreat risks diluting transparency and weakening corporate accountability on environmental and human rights issues. Nonetheless, the bloc insists that its recalibrated approach reflects pragmatism, maintaining sustainability ambitions while reducing red tape and supporting industrial resilience [1][2].

References
[1] EU Postpones Sustainability Reporting Rules for Non-EU Companies, ESG News. https://esgnews.com/eu-postpones-sustainability-reporting-rules-for-non-eu-companies/
[2] EU Parliament Plans to Cut Back Sustainability Law Further, Reuters. https://www.reuters.com/sustainability/climate-energy/eu-parliament-plans-cut-back-sustainability-law-further-2025-10-08/