Delays to CSRD & CSDDD Sustainability Reporting
The EU’s decision to delay key sustainability reporting regulations under the Omnibus package is a significant moment for large companies.
While the focus has been on reducing regulatory burdens for SMEs, this shift will have notable implications for enterprises already investing heavily in ESG compliance and reporting.
CSRD & CSDDD: Regulatory Relief or Uncertainty?
For enterprises that have been preparing for the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), this delay presents both opportunities and challenges.
On one hand, it provides additional time to refine reporting processes, improve data quality, and align sustainability strategies with business objectives. On the other, it injects uncertainty into the long-term trajectory of ESG regulations, potentially stalling momentum in the efforts towards managing material issues for the business.
Compliance vs. Competitive Advantage
The EU’s push for harmonisation may simplify compliance on paper, but in practice, national interests often dilute ambitious ESG policies. Large companies operating across multiple jurisdictions must prepare for uneven enforcement and shifting expectations.
Furthermore, the move toward limited assurance rather than the more rigorous reasonable assurance seen in financial audits creates a credibility gap. While this may reduce immediate compliance costs, institutional investors and ESG-focused funds will continue to demand deeper validation and higher reporting standards. Companies that meet only the minimum requirements may inadvertently cause reputational issues for themselves.
Looking Forward: How Large Companies Can Stay Ahead
Invest in Robust ESG Data Systems – Superficial reporting won’t suffice. Strengthening data infrastructure ensures credibility and resilience.
Go Beyond Minimum Compliance – Investors and stakeholders expect more than regulatory box-ticking. Companies that pursue voluntary, high-assurance disclosures will stand out as long as they are material.
Monitor Regulatory Fragmentation – The Omnibus package delays reporting but does not eliminate it. Enforcement will vary by country, so flexibility is key but building a credible baseline of vetted sustainability (material) outputs can result in minimising the complexity and associated costs.
Anticipate Investor Scrutiny – ESG-focused investors are watching. Companies must address weak supply chains, carbon footprints, and governance risks before they become liabilities so the prudent risk management of the material issues will only add value to your business.
The best-prepared organisations will use this regulatory pause as an opportunity to refine their ESG narratives, enhance reporting methodologies, and reinforce their resilience of issues, which are deemed material.
Half-measures are not conducive for long-term value creation. For companies looking to attract capital, maintain trust, and future-proof their operations, keeping breast on the landscape is the only viable path forward.