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EU Commission relaxes rules: Companies breathe a sigh of relief!
The EU Commission is planning comprehensive changes to sustainability reports to improve competitiveness and environmental standards.
EU Commission relaxes rules: Companies breathe a sigh of relief!
The future of corporate responsibility in the EU is hanging in the balance! The European Commission has announced decisive measures that will particularly affect large companies. The first “omnibus” proposals were presented on Wednesday, which envisage postponing the controversial supply chain law by one year. This particularly affects companies with more than 5,000 employees and a global annual turnover of over 1.5 billion euros. Instead of the originally planned compliance starting July 26, 2027, these companies now have until July 26, 2028 to prepare for the new requirements, like oe24 reported.
Another big topic is the requirements for sustainability reporting. Around 80 percent of EU companies are to be exempt from the new reporting requirements introduced by the Corporate Sustainability Reporting Directive (CSRD). Instead, the requirements should only apply to large companies in order to reduce bureaucratic hurdles. This means that smaller companies will be partially exempted from the obligations, a development that is being widely discussed in the industry. As a result, around 90 percent of small importers can be exempt from new CO2 border adjustment measures, which should provide relief for many smaller players CSR in Germany explained.
Changing reporting requirements and increased accountability
From January 2024, certain large companies will be required to report on their sustainability practices, with the requirements gradually being expanded to include other companies. The full scope is estimated to increase from 11,600 to 49,000 companies required to account for their sustainability performance. This is done within the framework of the CSRD, which is intended to significantly expand and standardize the previous reporting obligations. The introduction of concrete auditing standards and the required external audit of reporting further underlines the importance of sustainability for companies, and this is a step in the right direction!
With more than a quarter less bureaucracy, this new regulatory approach is intended to ease the burden on companies while increasing accountability. This shows that the EU is serious about encouraging companies to comply with environmental and social standards and thus take responsibility for their global business practices.