A quarter of firms plan to slow down corporate reporting amid CSRD rethink

Only a quarter of companies plan to slow down their corporate reporting efforts in light of the EU’s ‘omnibus’ proposal. 

New research has found 25% of firms will take their foot off the pedal while they wait to see how lawmakers reduce the scope of the Corporate Sustainability Reporting Directive (CSRD).   

The survey, conducted by CSRD advisory and data house Palau Project, polled 83 sustainability managers within companies, and 88 service providers. 

Some questions were answered by all respondents, while others were only answered by the companies – most of whom (55%) have to start reporting next year under the Directive’s current timeline. 

More than half (51%) of all participants reported feeling frustrated with the EU’s move to amend its sustainability rules after they became law, while less than 5% regard the Commission’s proposals as positive. 

“We are navigating a situation where compliance is mandatory, but the future direction of reporting requirements and expectations remains unclear,” said one anonymous respondent. 

However, another admitted to being “relieved” at the prospect of being removed from reporting duties. 

A third of respondents said it was harder to plan and invest in reporting amid uncertainty about what the final revisions would look like, but 31% said their leadership had decided to push on with their CSRD efforts anyway, and 23% claimed to be using the political delays to work on improvements on their internal systems and processes. 

Stop-the-clock

To give policymakers space to negotiate changes to CSRD, they will first approve a ‘stop-the-clock’ proposal that will put the Directive’s implementation on hold. 

The current plan is to introduce a two-year delay, but that could change during negotiations. 

Some lawyers have suggested a decision could take up to six months, but respondents to Palau’s poll were less optimistic, with 60% expecting it to take longer. 

Sources close to Parliament and Council say each body will reach negotiating positions on the ‘stop-the-clock’ proposal within the next three weeks, so it’s possible the delays will be confirmed before the summer.

VSME adoption

Smaller companies are likely to be removed from the scope of CSRD, and invited to report voluntarily using standards known as VSME.  

Palau’s survey suggests there is limited appetite for this, with just 23 of the 69 eligible respondents saying they were considering switching to VSME. 

Around the same number plan to continue using the main European Sustainability Reporting Standards.