EU Now Exempts 8-in-10 Firms from ESG Reporting
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Posted On: 03/04/2025 4:45:06 PM
EU Now Exempts 8-in-10 Firms from ESG Reporting
Last week, the European Commission introduced its Omnibus Simplification package. This package contains a series of measures focused on reducing sustainability reporting requirements and regulatory burdens for firms.
These measures include capping the sustainability data that large banks and firms can request from smaller firms and eliminating a percentage of firms from the Corporate Sustainability Reporting Directive’s scope. In its statement, the Commission explained that it expected these measures to create roughly €6.4 billion ($6.68 billion) in annual administrative cost savings for firms.
The Corporate Sustainability Reporting Directive (CSRD) establishes reporting requirements on the impact of a firm’s actions on the environment, social standards, and human rights, as well as sustainability-related risk. This directive went into effect for large firms with more than 500 employees last year, with the first reports being presented this year.
Firms with over 250 employees were set to publish their reports the following year, with listed small and medium-sized enterprises following suit a year later. Under a new measure, though, only firms with over 1000 employees and either a balance sheet of more than €25 million ($26.11 million) or revenues higher than €50 million ($52.23 million) will be included in the directive’s scope.
This means that 8 in every 10 firms have been eliminated from the directive’s sustainability reporting requirements.
The measure also introduces scope reductions and simplifications for the EU’s Taxonomy Regulation, the Corporate Sustainability Due Diligence Directive, and the Carbon Border Adjustment Mechanism. For instance, the Taxonomy Regulation will only be compulsory for firms with revenues higher than €450 million ($470 million).
The application of the Corporate Sustainability Due Diligence Directive for large firms will also be delayed to July 2028, with the frequency of monitoring the effectiveness of due diligence also changing to once every 5 years from once every year. Additionally, the Commission plans to amend the European Sustainability Reporting Standards to decrease the number of data points needed by sustainability reporting standards.
Many of the other proposals presented focus on smaller businesses, which aligns with the commission’s competitive compass that’s geared towards boosting the global competitiveness and productivity of Europe. For smaller firms, the European Union plans to present voluntary sustainability reporting requirements based on the voluntary standards for small and medium-sized enterprises.
It should be noted that the CSRD’s reporting approach will be retained as it requires that all companies report on both their impact and risks of sustainability issues, as well as their impacts on society and the environment.
North American companies like Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are likely to keep an eye on the evolving ESG reporting requirements in Europe as these laws could one day impact their operations, especially if they start selling minerals to buyers in the EU.
NOTE TO INVESTORS: The latest news and updates relating to Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are available in the company’s newsroom at https://ibn.fm/RFLXF
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
Last week, the European Commission introduced its Omnibus Simplification package. This package contains a series of measures focused on reducing sustainability reporting requirements and regulatory burdens for firms.
These measures include capping the sustainability data that large banks and firms can request from smaller firms and eliminating a percentage of firms from the Corporate Sustainability Reporting Directive’s scope. In its statement, the Commission explained that it expected these measures to create roughly €6.4 billion ($6.68 billion) in annual administrative cost savings for firms.
The Corporate Sustainability Reporting Directive (CSRD) establishes reporting requirements on the impact of a firm’s actions on the environment, social standards, and human rights, as well as sustainability-related risk. This directive went into effect for large firms with more than 500 employees last year, with the first reports being presented this year.
Firms with over 250 employees were set to publish their reports the following year, with listed small and medium-sized enterprises following suit a year later. Under a new measure, though, only firms with over 1000 employees and either a balance sheet of more than €25 million ($26.11 million) or revenues higher than €50 million ($52.23 million) will be included in the directive’s scope.
This means that 8 in every 10 firms have been eliminated from the directive’s sustainability reporting requirements.
The measure also introduces scope reductions and simplifications for the EU’s Taxonomy Regulation, the Corporate Sustainability Due Diligence Directive, and the Carbon Border Adjustment Mechanism. For instance, the Taxonomy Regulation will only be compulsory for firms with revenues higher than €450 million ($470 million).
The application of the Corporate Sustainability Due Diligence Directive for large firms will also be delayed to July 2028, with the frequency of monitoring the effectiveness of due diligence also changing to once every 5 years from once every year. Additionally, the Commission plans to amend the European Sustainability Reporting Standards to decrease the number of data points needed by sustainability reporting standards.
Many of the other proposals presented focus on smaller businesses, which aligns with the commission’s competitive compass that’s geared towards boosting the global competitiveness and productivity of Europe. For smaller firms, the European Union plans to present voluntary sustainability reporting requirements based on the voluntary standards for small and medium-sized enterprises.
It should be noted that the CSRD’s reporting approach will be retained as it requires that all companies report on both their impact and risks of sustainability issues, as well as their impacts on society and the environment.
North American companies like Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are likely to keep an eye on the evolving ESG reporting requirements in Europe as these laws could one day impact their operations, especially if they start selling minerals to buyers in the EU.
NOTE TO INVESTORS: The latest news and updates relating to Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are available in the company’s newsroom at https://ibn.fm/RFLXF
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
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