European Union Flag EU Flags side by side in the Wind- European Union Flags in a row in front of the … More facade of the European Commission Headquarter blowing in the wind. European Commission, Downtown Brussels, Belgium, Europe<\/p>\n
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On April 25, the European Financial Reporting Advisory Group submitted a work plan for the rewrite of the European Sustainability Reporting Standards<\/a>. The request is in response to a letter from Maria Lu\u00eds Albuquerque<\/a>, the EU Commissioner for Financial Services and Investments, asking for updated recommendations to comply with the Omnibus Simplification Package\u2019s proposed reductions to sustainability reporting requirements. A vote by EFRAG\u2019s Sustainability Reporting Board in mid-April failed to garner enough support, giving hope to sustainability advocates. However, the SRB met the Council\u2019s requested completion timeline of October 31.<\/p>\n As part of the European Green Deal, the EU proposed a series of regulations aimed at controlling businesses\u2019 climate related activities. In 2022, the Corporate Sustainability Reporting Directive<\/a> was adopted to create requirements for businesses to report greenhouse gas emissions and other environmental, social, and governance actions. The CSRD called for the drafting of European Sustainability Reporting Standards to create the regulatory framework for reporting. That responsibility was delegated to EFRAG.<\/p>\n EFRAG released the first round of ESRS in late 2022. The European Commission officially adopted them in July 2023 and EFRAG was tasked with drafting sector specific and non-EU company ESRS. However, companies struggled with implementing the first round of ESRS. This forced the Commission to delay further development by EFRAG, shifting focus to drafting additional guidance.<\/p>\n By the summer of 2024, the tide had shifted on sustainability and other green initiatives. During the 2024 European Parliament elections, the regulatory burden on businesses became a major theme. During the campaigns, the European Green Deal took the majority of the blame for the EU\u2019s faltering economy. The elections resulted in a shift to the right, with environmentally focused parties losing seats.<\/p>\n In February, the European Commission adopted a proposal to drastically reduce sustainability reporting requirements in the European Union, including a rewrite of the ESRS. While the proposal has yet to be adopted by the European Parliament, the Commission is moving forward by requesting EFRAG begin the rewrite, in anticipation of the final passage. The instructions indicate that they expect passage of reforms by the end of 2025.<\/p>\n In the letter sent on March 25<\/a>, Albuquerque stated, \u201cas you will be aware, on 26 February the Commission adopted a first \u2018omnibus\u2019 package of proposals to simplify EU rules, boost competitiveness, and unlock additional investment capacity. You will also have seen that, as part of this initiative, we propose to adopt a delegated act to revise and simplify the existing European Sustainability Reporting Standards (ESRS).\u201d<\/p>\n The work plan adopted by EFRAG\u2019s SRB states that they will immediately start work to \u201cestablish a vision on actionable levers for substantial simplification.\u201d Initial input is being sought from stakeholders<\/a> via an online survey open until May 6. Mid-May through July will be focused on \u201cdrafting and approving the Exposure Drafts amending ESRS.\u201d An Exposure Draft, or public draft of the proposal, will be published in August. EFRAG will hold a public consultation in September. The final draft will be submitted to the Commission in October.<\/p>\n