EU delays corporate transparency rules for mining, oil and gas firms

The European Parliament and the Council of EU member states agreed on Wednesday evening (7 February) to grant a two-year delay for sector-specific standards under the Corporate Sustainability Reporting Directive (CSRD), offering a break to mining and fossil fuel firms targeted by the upcoming transparency rules.

The deal reached on Wednesday will give companies more time to prepare for the sectorial reporting rules, the Council said in a statement.

Those will be adopted in June 2026, two years later than originally planned, it added.

Belgium, the current holder of the rotating EU Council presidency, welcomed the agreement, saying it fits with its agenda of “boosting European competitiveness” and “reduc[ing] the administrative burden on companies”.

“Today’s agreement limits reporting requirements to the minimum and gives companies time to implement the European Sustainability Reporting Standards (ESRS) and prepare for the sectorial European Sustainability Reporting Standards,” said Vincent Van Peteghem, Belgian deputy prime minister and minister of finance.

The EU’s Corporate Sustainability Reporting Directive (CSRD), in force since January last year, requires listed companies to disclose information about the social and environmental risks associated with their activities.

Since January this year, the first set of general reporting standards – the European Sustainability Reporting Standards (ESRS) – became applicable to large companies across all economic sectors.

Those were expected to be followed by specific reporting standards for sectors like oil and gas, mining, road transport, textiles, as well as agriculture and fishing.

The sector-specific standards had already been drafted by a technical body advising the European Commission, the European Financial Reporting Advisory Group (EFRAG), and were almost ready for publication, Euractiv understands.

But in October last year, the Commission proposed to postpone them for two years, based on a recommendation from EFRAG.

The move caused concern among a group of 21 academics, who wrote a letter to the European Commission before Wednesday’s meeting to express their concerns.

“As the academic community, we are worried by the current proposal to postpone the sector standards by two years,” reads the letter, penned by Prof. Dr. Frank Schiemann and Dr. Blerita Korca from the University of Bamberg in Germany, as well as Assoc. Prof. Dr. Florian Habermann from Radboud University Nijmegen in the Netherlands.

“This suggestion jeopardises not only the immediate benefits of sector standards for sustainable development and the financial sector but also deprives companies of guidance for their reporting obligation under the CSRD,” they warned.

The letter was signed by 21 academics from across Europe, including professors from the University of Groningen, the University of Trento, the Krakow University of Economics, and the EM Strasbourg Business School.

In the letter, the academics underlined the immediate benefits brought by greater transparency in corporate reporting, pointing out that “mine accidents have decreased after a disclosure mandate” that was issued by the US Securities and Exchange Commission.

“Companies have to start reporting now and sector standards can be crucial to support their materiality assessment,” they argued, urging the Commission to adopt the standards that had already been largely drafted by EFRAG.

“The prompt release of standards for sectors with significant impact is crucial. By 2026, all high-impact sectors identified by EFRAG should be comprehensively addressed,” the academics wrote, suggesting to use the two-year delay as an opportunity to implement pilot projects and “address sector-specific issues such as materiality analyses or transition pathways and plans”.

In the European Parliament, meanwhile, some rejoiced at the two-year postponement of rules.

“Everyone has finally understood that companies cannot be overloaded with new standards every year,” said Axel Voss, a German lawmaker from the centre-right European People’s Party (EPP).

“They have been putting up with too much bureaucracy in years of crisis, from COVID to inflation. There is also a lack of quality if you don’t take the time to develop such standards in a practical way,” he said.

Others, however, pointed to wording added to Wednesday’s agreement, which says the two-year delay “does not prevent the Commission from publishing the sector specific sustainability reporting standards” before 2026.

“The Commission shall endeavour to adopt eight of the sustainability reporting standards … as soon as each is ready,” says the revised Article 29b(1) of the directive, according to the compromise text adopted on Wednesday.

“We had to fight hard against EPP to make sure that we don’t lose time on sectors for which the standards are almost ready,” said Pierre Karleskind, a centrist MEP from the Renew Europe political group in Parliament.

“Oil, gas and mining are high-risk sectors, and with this deal, they will have to start reporting earlier than other sectors,” he told Euractiv in emailed comments.

Under the Corporate Sustainability Reporting Directive (CSRD), companies with over 250 staff and a turnover of €40 million have to disclose environmental, social, and governance (ESG) risks, as well as the impact of their activities on the environment and people.

Smaller listed companies are subject to a lighter set of reporting standards, from which they can opt out until 2028.

EU agrees deal on company disclosures to combat greenwashing

The European Union has reached a deal on corporate sustainability reporting requirements for large companies from 2024, the French EU Presidency announced on Tuesday (21 June).

[Edited by Zoran Radosavljevic]

Read more with Euractiv

Next EU legislative term must reconcile climate and industry, says French think tank

Équilibre des énergies (EdEn), a French think tank, issued its recommendations for the next EU term of office (2024-2029). In exclusivity for Euractiv France, the group stresses the need for a European industrial strategy that is properly geared towards the climate and the economy, rather than a collection of targets.