The EU Corporate Sustainability Reporting Directive Continues Its Slow, Uncertain March Toward Simplification

Ropes & Gray – in conjunction with leading law firms across Europe – has released a new update of its monthly CSRD Transposition Tracker. The Tracker describes Corporate Sustainability Reporting Directive transposition and other Omnibus activity across the 27 EU member states and three EEA EFTA countries. This update includes information and developments as of September 30, and for some countries into October, as well as additional commentary from many of the participating law firms.

Adoption of the "Stop the clock" directive continues, but still has a way to go. Thus far, 12 countries have adopted legislation to implement the "Stop the clock" directive. Another ten countries have introduced, but not yet adopted, implementing legislation. For further details, see the Tracker.

All eyes are on the European Parliament as its slow slog to finalize its negotiating position on the Omnibus proposal continues. In a vote last week, the Parliament rejected the proposal to enter into Omnibus negotiations on the terms adopted by the Parliament's Legal Affairs Committee (JURI) on October 13, as discussed here and here.

The Omnibus proposal will now be considered by the full Parliament at its next plenary session in mid-November. Members of Parliament may propose further amendments to the text in advance of the vote. Parliament's negotiating position on the CSRD may therefore change from the October 13 JURI position. This also likely prolongs the uncertainty around the ultimate requirements of the CSRD.

As part of a broader call to action in advance of the Council's October 23 meeting, the leaders of 19 EU countries sent a letter to the European Council President, calling for among other things swift adoption of CSRD simplification (discussed here). At the October 23 meeting, the Council reaffirmed the urgent need to pursue the simplification of EU rules and welcomed the progress achieved so far, including on the "Stop the clock" directive. It called on the co-legislators to swiftly conclude remaining Omnibus work. The Council finalized its Omnibus negotiating position over the summer (discussed here).

In the meantime, EFRAG continues to work toward finalizing its European Sustainability Reporting Standards drafts, as further discussed here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.