The European Commission has confirmed plans to delay the adoption of ESRS for non-EU companies under the CSRD as part of its broader simplification agenda.
The move forms part of efforts to enhance productivity and competitiveness across the region by reducing regulatory and administrative burdens on businesses, claims ESG Today.
In a letter addressed to the EU’s financial regulators, the Commission revealed that around 115 legislative acts have been classified as “non-essential” for achieving EU policy objectives, including the Delegated Act on ESRS for third-country undertakings. The letter highlights stakeholder concerns regarding the scale of follow-up measures — roughly 430 legislative acts — that have emerged from previously adopted regulations and directives.
The ESRS framework outlines how companies must disclose sustainability-related risks, impacts, and opportunities under the CSRD, which began applying to EU-based companies in early 2024. Initially, the rules for large non-EU firms operating in the bloc were scheduled for adoption by June 2024, but this timeline was later postponed to June 2026. The latest letter indicates that these de-prioritised acts will now not be adopted before October 2027.
The delay aligns with the ongoing Omnibus I initiative, which is currently under debate by EU lawmakers. This proposal seeks to streamline various regulatory frameworks, including the CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD). Among its notable reforms are plans to raise the CSRD’s reporting threshold to companies with more than 1,000 employees — up from 250 — and to reduce the depth and volume of reporting obligations. Earlier this year, a “stop-the-clock” directive was also passed, temporarily pausing CSRD implementation for smaller firms that have not yet started reporting.
The decision also reflects transatlantic negotiations following concerns from U.S. policymakers. The U.S. has expressed opposition to the application of CSRD requirements to American companies, leading to a recent EU-U.S. framework agreement committing to ensure that sustainability rules do not “pose undue restrictions on transatlantic trade.”
Beyond the delay for non-EU companies, the Commission also confirmed that ESRS for listed SMEs and sector-specific standards are among the acts to be de-prioritised. However, given the expected outcome of the Omnibus process, these requirements may ultimately be scaled back or dropped altogether.
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