On April 3, 2025, the EU Parliament approved the EU Commission's proposal to postpone the application of the CSRD and the Corporate Due Diligence Directive by two years. Final approval by the EU Council is now required to finalize the postponement, but this is only a formality.
Last week, the European Financial Reporting Advisory Group (EFRAG) was also given another mandate to revise the ESRS standards by the end of October 2025. The focus is to be on collecting fewer relevant data points overall, reducing many of the qualitative data points, and concentrating more on relevant, quantitative data points.
Who is affected by the shift?
The time relief particularly affects companies that would have fallen under the CSRD for the first time from the 2025 financial year under the previous plan. For these companies, the first mandatory sustainability report will now be postponed to 2028 (for the 2027 financial year). This decision was made as part of the so-called “stop-the-clock” proposal, which is part of the EU Commission's omnibus package. The aim of this package is to give companies more time to prepare for the new sustainability reporting requirements while at the same time revising the reporting standards to reduce the administrative burden.
There are also currently developments in the voluntary sustainability standard VSME. It is envisaged that small companies with up to 500 employees will only be allowed to request the information contained in the VSME. Additional information should only be requested if it is necessary for the risk analysis and cannot be obtained in any other way.
Fin.Connect.NRW advises: Set up the ESG data structure now.
This does not mean that the issue of sustainability is off the table. The objectives remain on the agenda and will catch up with companies in two years at the latest. That's why now is the right time to take your time to strategically set up your ESG data structure and test it in a trial year so that you will be ready in two years' time. A successful start by 2028 requires preparation and a clear structure:
- Tackle the double materiality analysis now: The double materiality analysis is the first step towards a viable sustainability report. It helps to systematically identify relevant topics - taking into account internal processes and external expectations.
- Stakeholder activation: For the subsequent data collection, all departments involved must be involved at an early stage, sensitized and prepared for their tasks.
- Piloting and test run: A trial report in 2026 can provide valuable insights: What data is missing? Which processes are working? In this way, companies can establish a robust report by 2028 - with clear structures and a well-established system.
