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The delay of sector-specific ESRS reporting standards: all you need to know

Written by
Camille Charluet
March 1, 2024
min read

The introduction of the first set of European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD) marked a big step forward towards encouraging more responsible corporate practices across Europe. However, as of now, the ESRS are not yet finalized.

While a second batch of standards including sector-specific guidelines and disclosures for non-EU companies was scheduled for mid-2024, the timeline has now been pushed back by two years

With the incomplete status of the ESRS already creating confusion, this further delay is leaving companies and experts at a loss on how to fully prepare their reporting strategies. 

So, what exactly has been put on hold? What are the repercussions of these changes? And how can companies navigate CSRD compliance in the meantime? Here’s everything you need to know.

Background: The first set of ESRS

On July 31, 2023, the European Commission adopted the first set of ESRS. These are the mandatory standards companies must follow if they fall under the scope of the CSRD. They guide businesses on exactly what to report in terms of environmental, social, and governance (ESG) impacts and initiatives.

This first batch of ESRS includes 10 ESG-focused standards alongside two cross-cutting standards applicable to all reporting organizations, regardless of their sector.

Delay of sector-specific sustainability disclosures

On the horizon were sector-specific standards, initially due for release by June 30, 2024. These are anticipated to offer more specific reporting requirements tailored to the unique environmental and social conditions of various sectors.

Earlier this month, the EU decided to push back the deadline for these sector-specific standards to June 30, 2026. In their own words, this decision aims to give companies “more time to apply the first batch of standards and prepare for the next ones.” 

The delay will impact a wide range of industries — oil and gas, mining, food, automotive, road transport, energy, agriculture, and textiles, to name a few.

Delay of reporting standards for non-EU companies

The EU also decided to delay adopting reporting standards for non-EU companies with €150 million turnover in the EU and at least one European subsidiary until the same date. 

Despite the delay, these third-country companies must still start reporting in 2029 for the 2028 financial year, as set out in the CSRD reporting timeline.

Updated timeline for ESRS adoption at a glance

The timeline for the implementation of sector-specific ESRS and general standards for non-EU companies has been extended. 

  • Original schedule: Adoption by June 30, 2024
  • Revised date: Delayed to June 30, 2026
  • Reporting start date: Non-EU companies with significant operations in the EU must begin reporting in 2029 for the financial year 2028, according to the CSRD timeline.

Consequences of the ESRS delay

While the extended timeline gives companies more time to focus on the broader ESG disclosures, it also carries several potential challenges:

Increased uncertainty and preparation hurdles

Without finalized standards for certain sectors and countries, companies are left guessing on how to tailor their sustainability reports to meet future requirements. This lack of clarity could affect overall readiness, and lead to a last-minute scramble once the standards are eventually released.

Inconsistent reporting practices

The severe lack of detailed sector- and country-specific guidance may lead to inconsistent reporting practices. This could make it challenging for stakeholders to accurately compare sustainability performance across different industries and regions.

Heavier reporting workload

With over 1100 disclosures across 12 categories, preparing an ESRS report already takes a huge amount of time. One sustainability expert estimated that it takes around 375 hours to compile the necessary data based on the first set of ESRS. 

The introduction of new standards will mean additional work and revisions to comply. This could further strain sustainability teams, especially those where reporting duties fall onto a single person.


A missed opportunity for trust and clarity in sustainability reporting

Simply put, the delay of the second set of ESRS is disappointing. It isn’t helping to build trust in corporate sustainability efforts and may signal a lack of urgency to tackle critical environmental and social responsibilities.

Reporting on entity-specific topics – mandatory under the CSRD – will likely remain vague until the first wave of companies start reporting or auditors set some best practices. 

It’s concerning to see the European Financial Reporting Advisory Group (EFRAG) and the European Commission drag their feet on rolling out one of the most game-changing sustainability reporting frameworks to date. The delay could slow down progress toward better transparency and accountability in corporate sustainability practices.

How to deal with CSRD compliance right now 

Despite the incomplete status of the ESRS, there are several steps you can take right now to get as prepared as possible:

1. Leverage existing guidelines and best practices

Consider any benchmarks or guidelines that exist for your sector or country. This will ensure you’re better prepared when the specific standards are released. 

2. Take proactive steps now

Don’t wait for the final standards to be published to start your compliance journey. Familiarize yourself with the current reporting requirements, gather sustainability data, and prepare your first report based on the first set of ESRS.

3. Stay agile and flexible

Be ready to adjust your reporting practices and processes when the final standards are released. Stay informed about policy developments so you’re not caught off guard.

4. Use the right sustainability software

Achieving CSRD compliance is challenging, but you don’t need to tackle it alone. Using a sustainability platform like Coolset can fast-track your compliance efforts, even before the ESRS are fully finalized.

Need more help on becoming CSRD compliant? Talk to one of our experts to get advice on how to get started.

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