EU commission takes action against 17 member states over CSRD delays
The European Commission has taken formal action against 17 EU member states for failing to fully implement the Corporate Sustainability Reporting Directive (CSRD) by the July 2024 deadline. In letters sent to countries including Germany, Spain, and Poland, the Commission opened infringement procedures, signalling its desire to get this initiative implemented. The CSRD significantly broadens the scope of mandatory sustainability disclosures across Europe, covering an estimated 50,000 companies, compared to just 12,000 under the previous Non-Financial Reporting Directive (NFRD).
This new directive builds on the NFRD, introducing more detailed and stringent requirements based on the European Sustainability Reporting Standards (ESRS) – which are also accompanied by digital taxonomies. It obliges companies to report on a wide range of topics, including environmental impact, human rights, social standards, and sustainability-related risks.
Reporting will begin in 2025 for large public-interest companies, followed by smaller businesses in 2026, and listed SMEs in 2027. However, the Commission’s move highlights that without full implementation across member states, the goal of harmonised reporting may be at risk. The Commission warned that the failure to implement the CSRD means investors may not have access to reliable and comparable data needed for informed decision-making. If the countries fail to respond within two months, further steps will follow, including possible referral to the Court of Justice.
Even with these delays at the national level, companies should not wait. Those impacted by the CSRD would be well advised to start laying the groundwork for compliance now. It’s essential for EU companies affected by the CSRD to start building digital-first processes for standardised ESG reporting. Moving to standardised digital processes for sustainability reporting will help ensure they are ready to meet regulations, and have high-quality data systems in place. Ultimately, this shift should lead to better-quality data, better decision-making support and more transparent sustainability reporting, benefitting both companies and stakeholders.
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