A few weeks ago we wrote about the fact that the European Commission had decided to simplify and postpone the rules it had planned to introduce on sustainability reporting and due diligence.
The Corporate Sustainability Reporting Directive ((EU) 2022/2464) (CSRD) requires companies in-scope to report on how sustainability issues affect their performance, position, and development as well as about their own impact on the environment and people.
The Corporate Sustainability Due Diligence Directive ((EU) 2024/1760) (CSDDD) contains a framework for sustainability due diligence for large EU companies and non-EU companies with significant EU activity.
On 16 April 2025, Directive 2025/794 was published in the EU's Official Journal, postponing the application dates of certain corporate sustainability reporting requirements in the CSRD and the CSDDD. Member States will have to transpose the Directive by 31 December 2025.
The Directive postpones:
- The application of sustainability reporting requirements under the CSRD for two years.
- The transposition deadline for the CSDDD to 26 July 2027.
- The first phase of the CSDDD's application to in-scope companies by one year to 26 July 2028.
Deforestation Regulation
As well as this, the European Commission has also proposed simplifying the Deforestation Regulation. The Regulation aims to ensure that key goods in the EU market do not contribute to deforestation and forest degradation both in the EU and globally. The Commission has published new guidance documents in preparation for the Regulation's entry into application at the end of 2025 for Member States, operators and traders. The guidance is expected to significantly reduce the number of due diligence statements that companies need to file.
The Commission is also consulting on clarifications to the product scope under the Deforestation Regulation. It proposes that waste, second-hand and used products, samples of products and products used for examination, analysis and testing are not in scope. It also clarifies the circumstances in which packing materials fall outside the Regulation's scope. The consultation ends on 13 May 2025.
Companies will be glad of the extra time to prepare for the obligations under the CSRD and CSDDD. However, critics say the EU is watering down the obligations.
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