Directive (EU) 2024/1306 amending Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings

Summary:

Directive (EU) 2024/1306 - adopted by the co-legislators on 29 April 2024 - introducing amendments to Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings. This is a text with EEA relevance.

Further information:

Directive 2013/34/EU - also known as the Accounting Directive - seeks to ensure the clarity and comparability of financial statements, other than international financial reporting standards (IFRS).

In its Communication addressing long-term competitiveness in the European Union (EU), the European Commission stressed the importance of a regulatory system that ensures that objectives are reached at minimum costs. It committed to a fresh push to rationalise and simplify reporting requirements. While these play a key role in ensuring correct enforcement and proper monitoring of legislation, they can also impose disproportionate burdens on stakeholders.

The Accounting Directive requires large companies and listed SMEs, as well as parent companies of large groups, to include in a dedicated section of their management report the information necessary to understand the company’s impacts on sustainability matters, and the information necessary to understand how sustainability matters affect the company’s development, performance and position. This Act aims to rationalise reporting obligations by postponing the adoption deadline for sustainability reporting standards for certain sectors and for certain third country undertakings.

The draft law was adopted by the European Commission on 17 October 2023. The Council of the European Union adopted its general approach on 12 January 2024. The European Parliament's relevant committee adopted a negotiating position on 24 January. An informal agreement between the co-legislators on a compromise text for this file was reached on 7 February. This was formally endorsed by Parliament on 10 April and by the Council on 29 April. The Act was signed by the co-legislators on that same day, and also published in the Official Journal on 29 April 2024.

• Primary Source

Commentary and Analysis

Norton Rose Fulbright: Publications, November 2023: EU Commission to delay adoption of rules under the Corporate Sustainability Reporting Directive https://www.nortonrosefulbright.com/en-be/knowledge/publications/5242bf0a/eu-commission-to-delay-adoption-of-rules-under-the-corporate-sustainability-reporting-directive

Institute of Sustainability Studies: News Analysis, 30/01/2024: EU delays key sustainability reporting standards: Impact and analysis https://instituteofsustainabilitystudies.com/insights/news-analysis/eu-delays-key-sustainability-reporting-standards/

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News

Forbes Magazine, 24/01/2024: EU Moves To Delay ESG/ Sustainable Reporting Requirements Until 2026 https://www.forbes.com/sites/jonmcgowan/2024/01/24/eu-moves-to-delay-esg-sustainable-reporting-requirements-until-2026/

ESG Today, 08/02/2024: EU Lawmakers Agree to Delay Sustainability Reporting Standards for Specific Sectors and non-EU Companies by 2 Years https://www.esgtoday.com/eu-lawmakers-agree-to-delay-sustainability-reporting-standards-for-specific-sectors-and-non-eu-companies-by-2-years/

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Official

EUR-LEX: COM(2023)596: Proposal for a Decision amending Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2023:596:FIN

Publications Office of the EU: EU Law Tracker: Proposal for a Decision amending Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings https://law-tracker.europa.eu/joint-legislative-portal/procedure/2023_368?lang=en

European Parliament: Legislative Observatory: Procedure File for Proposal on Company law: time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings (2023/0368(COD)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2023/0368(COD)

European Parliament: Legislative Train Schedule: Proposal for a Decision amending Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings https://www.europarl.europa.eu/legislative-train/theme-an-economy-that-works-for-people/file-rationalise-and-simplify-time-limits-for-adoption-of-sustainability-reporting

General Secretariat of the Council (EU): Policies: Corporate sustainability https://www.consilium.europa.eu/en/policies/corporate-sustainability/

Council of the European Union: Press Release, 07/02/2024: Council and Parliament agree to delay sustainability reporting for certain sectors and third-country companies by two years https://www.consilium.europa.eu/en/press/press-releases/2024/02/07/council-and-parliament-agree-to-delay-sustainability-reporting-for-certain-sectors-and-third-country-companies-by-two-years/

Council of the European Union: Press Release, 29/04/2024: Council adopts directive to delay reporting obligations for certain sectors and third country companies https://www.consilium.europa.eu/en/press/press-releases/2024/04/29/council-adopts-directive-to-delay-reporting-obligations-for-certain-sectors-and-third-country-companies/#:~:text=More%20time%20to%20prepare%20reporting,companies%20to%2030%20June%202026.

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