The German government is calling for substantial changes to the Corporate Sustainability Reporting Directive (CSRD), seeking to delay sustainability reporting obligations for smaller businesses by two years and to eliminate sector-specific reporting requirements altogether.

The CSRD, a major update to the EU’s Non-Financial Reporting Directive (NFRD), expands the scope of mandatory sustainability disclosures from 12,000 to over 50,000 companies. Underpinned by the European Sustainability Reporting Standards (ESRS), the CSRD mandates detailed reporting on environmental impacts, human rights, social standards, and sustainability risks.

The CSRD’s phased implementation began in early 2024 for large public-interest entities with over 500 employees, requiring them to issue their first reports in 2025. It extends to companies with over 250 employees or €50 million in revenue the following year, listed SMEs a year after that, and non-EU companies with over €150 million in EU revenues by 2029.

While the initial set of sector-agnostic ESRS was adopted in July 2023, sector-specific standards—originally scheduled for 2024—were postponed to 2026 to give companies more time to implement the general requirements and to refine the standards. Germany’s proposal to scrap the sector-specific requirements altogether aims to simplify compliance for businesses, especially smaller enterprises.

This push reflects ongoing debates over balancing the need for robust sustainability disclosures with the challenges of regulatory complexity and implementation timelines.

“Stay ahead in sustainability compliance with Global PCCS,—where expert insights meet the latest regulations. Unlock a future where compliance fuels sustainability, helping your business thrive in a greener, well-regulated world. For more information, contact us at info@globalpccs.com.”