EU Delays CSRD Sustainability Reporting Requirements by Two Years

The European Union has officially announced a two-year delay in the implementation of sector-specific sustainability reporting standards under the Corporate Sustainability Reporting Directive (CSRD). Originally set to take effect from 2026, these requirements will now apply starting in 2028.

The postponement affects large companies already subject to CSRD, giving them more time to prepare for disclosing detailed information aligned with the European Sustainability Reporting Standards (ESRS) for specific industries.

This decision, adopted by the European Commission on July 9, stems from a desire to ease the regulatory burden on businesses, particularly in light of broader efforts to simplify EU reporting rules. The delay also allows the Commission additional time to ensure that the sector-specific standards are better aligned with international frameworks and reporting practices, including those of the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI).

The Commission emphasized that this move does not affect the current general ESRS, which companies must begin using from 2025 for 2024 reporting. It also reaffirmed its commitment to advancing sustainable finance and improving corporate transparency, stating that the extra time will be used to refine and consult on the sectoral standards to ensure they are robust, streamlined, and globally coherent.

The two-year postponement of sector-specific ESRS (from 2026 to 2028) alongside continued general-ESRS obligations reflects Commission recognition that sequencing matters - companies still building general reporting capabilities benefit from more time before adding sector-specific overlay. International alignment (ISSB, GRI) reduces cross-framework duplication that increases compliance cost without adding decision-useful information.

The delay's practical effect for CSRD-scope companies is buying preparation time, not eliminating obligations. Sector-specific standards will apply eventually; companies that use the extended runway to build data infrastructure will be better positioned than those that defer preparation entirely.

For CSRD-in-scope corporates, financial institutions with CSRD-scope portfolio exposure and their compliance advisors, Cognitud's ESG strategy and transformation, sustainability due diligence and market intelligence teams help clients evaluate exposure under extended sector-specific timeline, structure reporting capability aligned with general-ESRS obligations while preparing for sector-specific rollout, and prepare disclosures aligned with CSRD, ISSB and jurisdictional sector-specific frameworks.