The European Commission has announced plans to delay several pieces of scheduled legislation as part of its “de-prioritisation” process, including the adoption of the European Sustainability Reporting Standards (ESRS) for non-EU companies under the Corporate Sustainability Reporting Directive (CSRD).

This de-prioritisation was outlined in a letter sent by the Commission to the EU’s financial regulators as part of its broader simplification agenda. The initiative aims to enhance productivity, strengthen Europe’s global competitiveness, and reduce administrative burdens on companies. The Commission noted that more than 430 follow-up legislative acts have been authorized under recent regulations and directives, a volume that has raised concerns among stakeholders. As a result, 115 measures deemed “non-essential” to achieving EU policy goals—among them, the Delegated Act on ESRS for certain third-country undertakings—have been identified for delay.

The ESRS establishes the framework for companies to disclose sustainability-related impacts, risks, and opportunities under the CSRD, which took effect in early 2024. The CSRD also requires large non-EU companies operating within the EU to report sustainability information aligned with ESRS standards, with these obligations initially set to begin in 2028. The ESRS adoption for such non-EU companies was first scheduled for June 2024 but was already postponed to June 2026 by EU lawmakers last year.

According to the Commission’s letter, the newly de-prioritized legislative acts will not be adopted before October 2027.

The delay coincides with the ongoing Omnibus I initiative, currently under discussion by EU legislators, which proposes significant revisions to regulations including the CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD). This initiative seeks to lighten regulatory requirements on companies—most notably by raising the CSRD threshold to cover only firms with more than 1,000 employees (up from 250) and by reducing the volume of required disclosures. As part of this process, the EU recently enacted a “stop-the-clock” directive delaying CSRD implementation for smaller firms not yet reporting, pending final agreement on the revised framework.

The postponement also aligns with recent political developments, including resistance from the U.S. government to CSRD obligations for American firms and a new EU-U.S. framework agreement that commits to ensuring CSRD and CSDDD provisions do not create “undue restrictions on transatlantic trade.”

Other affected measures include the adoption of ESRS for listed SMEs and sector-specific standards, which may ultimately be dropped entirely under the Omnibus process.

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