EU to Expressly Set Out Sustainability Reporting Rules by October

• The EU has put on ice CSRD and CS3D compliance for both large and small companies.
• EU sustainability reporting standards are to become clearer by October 2025.

The European Financial Reporting Advisory Group (EFRAG), which advises the European Commission on financial and sustainability reporting, will deliver its recommendations for revising the EU sustainability disclosure rules by October 2025.

These standards, known as the European Sustainability Reporting Standards (ESRS), were created to help businesses report their social and environmental impacts under the Corporate Sustainability Reporting Directive (CSRD).

EFRAG has been tasked with simplifying the rules for companies, as many have described them as complex and burdensome.

At the beginning of April, EFRAG proposed a timeframe for the revision, but its sustainability board put the decision on ice, citing limited time for public feedback. In response, EFRAG stated that the longer it takes, the greater the delay for companies to comply with the rules. Subsequently, a compromise timeline was approved.

READ MORE: CSRD Reports: Finance Sector Outshines Others in Sustainability Impact

EFRAG will interview companies using the ESRS over the next month and use the insights, along with responses from the ongoing consultation, to draft changes by July. Once this is done, the drafts will remain open for public feedback for up to 45 days.

For more input, public outreach programmes are planned for September 2025, and EFRAG's final recommendations will reach the European Commission by October. This revision is part of the EU's Omnibus initiative to review and simplify complex sustainability laws.

EU lawmakers are also reviewing the Corporate Sustainability Due Diligence Directive (CS3D) and the CSRD legal rulebooks. Last week, the European Parliament began its review process, with its legal affairs committee (JURI) set to publish a draft report by June. A final vote is expected in October.

Despite these initiatives, discussions within the Parliament are moving at a snail's pace, and the lawmakers seem somewhat divided. However, the Council of the European Union is moving faster with the legislation and is expected to finalise its position by June.

ALSO READ: EU Weighs Omnibus Proposal, Insurers Left Out of CSRD: Report

On 16 April 2025, the EU announced it would give companies more time to comply with the CSRD and CS3D. This means large companies with over 250 employees, €50 million in turnover, or €25 million in assets have until 2028 to comply with the CSRD. In the meantime, listed small and medium-sized enterprises (SMEs) have until 2029, and large companies with over 5,000 employees have until 2028 to meet the CS3D requirements.

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Source: IPE