What changed

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SHORT JUSTIFICATION

* Consultation procedure

The Corporate Sustainability Reporting Directive (CSRD) requires large companies, listed small and medium-sized companies, and parent companies of large groups to report certain sustainability information.

*** Consent procedure

This reporting must follow standards that are to be adopted by the Commission through delegated acts. A first general set of such standards was adopted by the Commission in July 2023. A second sector specific set of standards is scheduled to be adopted by June 2024.

***I Ordinary legislative procedure (first reading)

As part of its competitiveness agenda, the Commission has committed to simplify reporting requirements for companies. The Commission has therefore proposed to postpone the adoption of the second set of standards under the CSRD by two years. This would mean these standards are adopted in June 2026 instead of June 2024, as currently foreseen.

***II Ordinary legislative procedure (second reading)

The rapporteur is of the opinion that this postponement will give companies necessary breathing space while ensuring the proper and full implementation the new sustainability requirements under the CSRD. No amendments to the Commission’s decision are therefore proposed.

***III Ordinary legislative procedure (third reading)

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(The type of procedure depends on the legal basis proposed by the draft act.)

The Committee on Economic and Monetary Affairs calls on the Committee on Legal Affairs, as the committee responsible, to propose that Parliament adopt its position at first reading, taking over the Commission proposal.

Amendments to a draft act

Amendments by Parliament set out in two columns

Deletions are indicated in bold italics in the left-hand column. Replacements are indicated in bold italics in both columns. New text is indicated in bold italics in the right-hand column.

The first and second lines of the header of each amendment identify the relevant part of the draft act under consideration. If an amendment pertains to an existing act that the draft act is seeking to amend, the amendment heading includes a third line identifying the existing act and a fourth line identifying the provision in that act that Parliament wishes to amend.

Amendments by Parliament in the form of a consolidated text

New text is highlighted in bold italics. Deletions are indicated using either the ▌symbol or strikeout. Replacements are indicated by highlighting the new text in bold italics and by deleting or striking out the text that has been replaced.

By way of exception, purely technical changes made by the drafting departments in preparing the final text are not highlighted.

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a decision of the European Parliament and of the Council amending Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings

(COM(2023)0596 – C9-0386/2023 – 2023/0368(COD))

(Ordinary legislative procedure: first reading)

– having regard to the Commission proposal to Parliament and the Council (COM(2023)0596)),

– having regard to Article 294(2) and Article 50(1) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C9-0386/2023),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to Rule 59 of its Rules of Procedure,

– having regard to the report of the Committee on Legal Affairs (A9-0000/2023),

1. Adopts its position at first reading, taking over the Commission proposal;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

EXPLANATORY STATEMENT

Reporting requirements play a key role in ensuring correct enforcement and proper monitoring of legislation. However, they also impose extra burden on companies, mainly SMEs. The Commission acknowledges that and therefore it has committed to rationalise and simplify reporting requirements with the ultimate objective of reduction of such burdens by 25%. This exercise should nevertheless not undermine the related policy objectives.

The recently adopted corporate sustainability reporting directive (CSRD) requires certain companies to report the information necessary to understand company's impacts on sustainability matters, and the information necessary to understand how sustainability matters affect the company's development, performance and position. Such information is reported in accordance with the standards to be adopted by the Commission by means of delegated acts.

The first set of general standards applicable to all undertakings under the CSRD scope was adopted by the Commission on 31 July 2023.

The second set of standards which are sector specific standards and standards under Article 29b(1) and standards for certain non-EU companies with business in the Union under Article 40b are set to be adopted by 30 June 2024.

The Commission proposes to give the companies sufficient time to prepare for any new reporting requirements and postpone the adoption of the second set of standards by two years, to 30 June 2026.

The rapporteur fully shares this assessment and objectives of this proposal as companies need more time to digest the first set of standards and to focus on their proper implementation. At the same time this extra time would give EFRAG and the Commission sufficient time to properly reflect on the development of effective and proportionate second set of the reporting standards, including via consultations with relevant stakeholders.

It needs to be noted that EU companies have recently been facing many challenges and heavy bureaucratic burden in times of the COVID pandemic as well as the war in Ukraine and its impact on energy prices etc. Postponing the adoption date of 2 years will be very relevant for companies under CSRD scope to recover while it will not negatively affect the achievement of the objectives in the area of sustainability reporting.