1760 as regards certain corporate sustainability reporting and due diligence requirements - Main contents

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dossier	COM(2025)81 - Amendment of Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760 as regards certain corporate sustainability ...
document	COM(2025)81
date	February 26, 2025

Annex, including whether it should be extended to cover additional adverse impacts; the rules on combatting climate change; the effectiveness of the enforcement mechanisms, penalties and the rules on civil liability; the level of harmonisation, including convergence and divergence between provisions of national law transposing this Directive.

1.4.The proposal/initiative relates to:

¨ a new action

¨ a new action following a pilot project / preparatory action ³³

¨ the extension of an existing action

þ a merger or redirection of one or more actions towards another/a new action

1.5.Grounds for the proposal/initiative

1.5.1.Requirement(s) to be met in the short or long term including a detailed timeline for roll-out of the implementation of the initiative

With this proposal, the Commission proposes a Directive amending a number of provisions of Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464, and (EU) 2024/1760. Once the co-legislators have reached an agreement on the contents of the proposal, the Member States will have a certain period of time to transpose the amendments introduced by this Directive into their national law.

In a separate legislative proposal, the Commission proposes to postpone the application of the sustainability reporting requirements in Directive 2013/34/EU for a period of two years for all large companies and listed SMEs – including non-EU issuers that meet these size thresholds - currently in scope and required to comply with sustainability reporting rules from financial year 2025 onwards. In the same proposal, the Commission also proposes to delay, by one year, the transposition deadline (to 26 July 2027) and the first wave of application (26 July 2028) of the sustainability due diligence rules set out in Directive 2024/1760.

The Commission also proposes to revise Commission Delegated Regulation (EU) 2023/2772 (European Sustainability Reporting Standards). The Commission will adopt the revised ESRS delegated act in time for those undertakings in the second wave that would be required to start reporting under the CSRD in 2028 for financial year 2027 to apply the revised standards.

To monitor progress towards achieving the proposal’s specific objectives, the Commission will explore the possibility of organising exchanges with stakeholders in different formats as well as periodic surveys of users of sustainability information and of undertakings that report such information, depending on the availability of financial resources. Article 6 of the CSRD requires the Commission to present a report on the implementation if the Directive by April 2029. The implementation of the CSDDD as amended, and its effectiveness in reaching its objectives, in particular in addressing adverse impacts, will also be subject to regular evaluation according to Article 36 of that Directive. This proposal does not require an implementation plan.

1.5.2.Added value of EU involvement (it may result from different factors, e.g. coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this section 'added value of EU involvement' is the value resulting from EU action, that is additional to the value that would have been otherwise created by Member States alone.

The Accounting Directive, as amended by the CSRD, already regulates the disclosure of sustainability information in the EU. Common rules on sustainability reporting and its assurance ensure a level playing field for companies established in the different Member States. Significant differences in requirements for sustainability reporting and assurance between Member States would create additional costs and complexity for companies operating across borders, which would be detrimental to the single market. Member States acting alone are not able to modify existing EU laws to reduce the burden on companies.

Similarly, the CSDDD already sets out a harmonised regulatory framework for corporate sustainability due diligence, and also covers certain third-country companies active in the EU market, ensuring level playing field in this policy area.

1.5.3.Lessons learned from similar experiences in the past

N/A

1.5.4.Compatibility with the multiannual financial framework and possible synergies with other appropriate instruments

N/A

1.5.5.Assessment of the different available financing options, including scope for redeployment

N/A

3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

3.1.Heading(s) of the multiannual financial framework and expenditure budget line(s) affected

N/A

4. Digital dimensions

4.1.Requirements of digital relevance

The reporting requirements introduced by Directive 2013/34/EU require companies to collect and report data concerning their impacts, risks and opportunities as regards material sustainability matters. This exercise entails significant data identification, collection, processing, verification and publication. In order to collect the relevant data, undertakings often use digital data collection and data sharing platforms. Additionally, in order to store and process the data for the purposes of sustainability reporting companies also often utilise digital data management tools.

Users of sustainability information increasingly expect such information to be accessible, comparable and machine-readable in digital formats. Member States must require that undertakings subject to the sustainability reporting requirements of Directive 2013/34/EU make their management reports available on their websites, free of charge to the public. Digitalisation creates opportunities to exploit information more efficiently and holds the potential for significant cost savings for both users and undertakings. Digitalisation also enables the centralisation at Union and Member State level of data in an open and accessible format that facilitates reading and allows for the comparison of data. These requirements also complement the creation of a European single access point (ESAP) for public corporate information.

As regards specific requirements within the Directive which are of digital relevance, please see below.

Directive 2013/34/EU requires undertakings subject to sustainability reporting to prepare their management report in the electronic reporting format specified in Article 3 of Commission Delegated Regulation (EU) 2019/815 (ESEF Delegated Regulation). It also requires these undertakings to mark up their sustainability reporting, including the disclosures required by Article 8 of Regulation (EU) 2020/852, in accordance with the digital taxonomy to be adopted by the Commission by way of an amendment to the ESEF Delegated Regulation.

A digital taxonomy for the Union sustainability reporting standards will allow sustainability reporting to be tagged and to be machine-readable. Until the adoption of this digital taxonomy, undertakings are not required to mark-up their sustainability statements. Considering that the sustainability statement will become machine-readable only once it is both included in an XHTML document and marked-up with a digital taxonomy, pending the adoption of the digital taxonomy undertakings are also not required to prepare the management report in XHTML.

Stakeholders affected by these requirements include undertakings required to prepare and publish a sustainability statement which has been digitally tagged and provided in an XHTML format, as well as assurance providers who must verify that the sustainability statement meets the necessary requirements.

The current proposal does not modify the existing digital tagging or format rules introduced by the CSRD, which will enhance digital reporting and enable the use of artificial intelligence in utilising the information that undertakings report.

As regards the CSDDD, digital tools and technologies, such as those used for tracking, surveillance or tracing raw materials, goods and products throughout value chains, for instance satellites, drones, radars, or platform-based solutions, could support and reduce the cost of data gathering for value chain management, including the identification and assessment of adverse impacts, prevention and mitigation, and monitoring of the effectiveness of due diligence measures.

4.2.Data

See section above.

4.3.Digital solutions

See section above.

4.4.Interoperability assessment

N/A

4.5.Measures to support digital implementation

To facilitate the smooth implementation of the requirements of digital relevance identified in Section 4.1., the Commission is involved in a number of initiatives.

Firstly, a digital taxonomy for the Union sustainability reporting standards will be necessary to allow the reported information to be tagged in accordance with those sustainability reporting standards. The Commission will adopt a digital taxonomy for the tagging of sustainability information via a Delegated Act, after having received technical advice from ESMA.

Secondly, in the framework of the 2025 Technical Support Instrument round, the Commission intends to launch a flagship multi-country project entitled "Improving Sustainability Reporting for Businesses." This initiative aims to enhance the capacity of Member States to support companies, particularly SMEs, in implementing CSRD and EU Taxonomy reporting requirements. The support under this initiative will take into account the evolution of the reporting requirements, and it will also be relevant for non-listed SMEs that are not subject to mandatory reporting but face growing demands for sustainability information from their financial and value chain partners.

Thirdly, EFRAG has launched an SME forum in which they bring together relevant stakeholders of the SME community to discuss the implementation of the sustainability reporting requirements and how digital solutions and tools can be used to facilitate sustainability reporting for SMEs.

As regards the CSDDD, in order to help companies fulfil their due diligence obligations along their value chain, the Directive encourages the use of digital tools and technologies and requires the Commission to issue guidelines with useful information and references to appropriate resources. When using digital tools and technologies, companies should take into account and appropriately address possible risks associated therewith, and put in place mechanisms to verify the appropriateness of the information obtained.

(1) “The future of European competitiveness”, September 2024.
(2) Budapest Declaration on the New European Competitiveness Deal, 8 November 2024.
(3) Communication from the Commission to the European Parliament, the European council, the Council, the European Economic and Social Committee and the Committee of the Regions, COM (2025) 30 final: A Competitiveness Compass for the EU.
(4) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, COM (2025) 47 final: A simpler and faster Europe: Communication on implementation and simplification.
(5) Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 (Corporate Sustainability Reporting Directive).
(6) Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 (Accounting Directive). Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 (Transparency Directive). Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 (Audit Directive). Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 (Audit Regulation).
(7) Communication from the Commission, ‘The European Green Deal, COM(2019) 640 final. Communication from the Commission ‘Action Plan: Financing Sustainable Growth’, COM/2018/097 final.
(8) Directive (EU) 2024/1760 of the European Parliament and of the Council of 13 June 2024 (Corporate Sustainability Due Diligence Directive).
(9) As well as public-interest entities that are parent undertakings of a large group with more than 500 employees, for consolidated sustainability reporting. “Public-Interest Entities” are defined by Article 2 point (1) of the Accounting Directive as undertakings that are: (a) governed by the law of a Member State and whose transferable securities are admitted to trading on an EU regulated market; (b) credit institutions; (c) insurance undertakings; or (d) designated by Member States as public-interest entities. “Large undertakings” are defined by Article 3(4) of the Accounting Directive as undertakings which on their balance sheet dates exceed at least two of the three following criteria: (a) balance sheet total: EUR 25 000 000; (b) net turnover: EUR 50 000 000; (c) average number of employees during the financial year: 250.
(10) As well as the other parent undertakings of large groups, for consolidated sustainability reporting.
(11) Small and non-complex credit institutions, and captive insurance and reinsurance undertakings, are also part of the third wave, although they may only use the additional two-year opt-out if they are listed SMEs.
(12) According to article 40a of the Accounting Directive, as amended by the CSRD, an undertaking not established in the EU must report sustainability information at the group level if it a) generates over EUR 150 million in the Union and b) has either a subsidiary in the EU that is subject to the sustainability reporting requirements introduced by the CSRD or has an EU branch that generated over EUR 40 million. In this case, the legal obligation to publish the report falls on the EU subsidiary or branch.
(13) Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards.
(14) EFRAG was previously called the European Financial Reporting Advisory Group but its official name is now just EFRAG. It is an independent private multistakeholder body, majority funded by the EU.
(15) The amount of work for a limited assurance engagement is significantly less than for a reasonable assurance engagement. The conclusion of a limited assurance engagement is usually provided in a negative form of expression by stating that no matter has been identified by the assurance provider to conclude that the subject matter is materially misstated. The conclusion of a reasonable assurance engagement is usually provided in a positive form of expression and results in providing an opinion on the measurement of the subject matter against previously defined criteria.
(16) In addition and for reasons of consistency, in Article 40a of the Accounting Directive, the net turnover threshold for an undertaking not established in the EU to be subject to the reporting requirements at the group level would be raised from EUR 150 million generated in the Union to EUR 450 million. Furthermore, for reasons of consistency, the threshold for the EU branch under article 40a is raised from EUR 40 million to EUR 50 million and the threshold for the EU subsidiary is limited to large undertakings as defined in the Accounting Directive. The key thresholds of the CSDDD are 1000 employees and EUR 450 million turnover.
(17) As well as undertakings that are not public-interest entities and that are parent of large groups with more than 500 employees, and undertakings that are parents of large groups up to 500 employees.
(18) As well as parent undertakings of groups with more than 1000 employees on average on a consolidated basis, for consolidated sustainability reporting.
(19) From 17 October to 1 December 2023, the Commission gathered feedback from 193 stakeholders on possible rationalization measures for reporting requirements: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13990-Administrative-burden-rationalisation-of-reporting-requirements_en .
(20) OJ C […], […], p. […].
(21) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 11 February 2025, ‘A simpler and faster Europe: Communication on implementation and simplification’, COM/2025/47 final.
(22) Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC (OJ L 157, 9.6.2006, p. 87, ELI: http://data.europa.eu/eli/dir/2006/43/oj ).
(23) Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19, ELI: http://data.europa.eu/eli/dir/2013/34/oj).
(24) Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting (OJ L 322, 16.12.2022, p. 15, ELI: http://data.europa.eu/eli/dir/2022/2464/oj).
(25) Directive (EU) 2024/1760 of the European Parliament and of the Council of 13 June 2024 on corporate sustainability due diligence and amending Directive (EU) 2019/1937 and Regulation (EU) 2023/2859 (OJ L, 2024/1760, 5.7.2024, ELI: http://data.europa.eu/eli/dir/2024/1760/oj).
(26) Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions of 11 December 2019, ‘The European Green Deal’, COM/2019/640 final.
(27) Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions of 8 March 2018, ‘Action Plan: Financing Sustainable Growth’, COM/2018/097 final.
(28) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13, ELI: http://data.europa.eu/eli/reg/2020/852/oj).
(29) Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonization of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 39, 31.12.2004, p. 38, ELI: http://data.europa.eu/eli/dir/2004/109/oj).
(30) Commission Delegated Regulation (EU) 2018/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (OJ L 143, 29.5.2019, p. 1, ELI: http://data.europa.eu/eli/reg_del/2019/815/oj).
(31) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13, ELI: http://data.europa.eu/eli/reg/2020/852/oj ).
(32) Directive (EU) 2025/XX of ……….
(33) As referred to in Article 58(2), point (a) or (b) of the Financial Regulation.