Jean-Jacques Pluchart
Directive 2022/2464 on the publication of sustainability information by companies based in the European Union – also known as the CSRD (Corporate Sustainability Reporting Directive ) – sets a new framework for the extra-financial reporting of listed or unlisted companies, large companies, mid-caps and SMEs. Its implementation is expected to take place over the period 2024-2026. Its transposition into national law was due to take place by 6 July 2024 at the latest, but on 26 September the European Commission had to issue a warning to 17 Member States, including Germany, for delays in transposition. This reprimand has provoked reactions in several EU countries – notably in Germany – where elected officials have described the regulatory process as “technocratic”, stating that the CSRD is difficult to apply in its current form, particularly by mid-caps and SMEs. Its premature application would risk weighing on the competitiveness of companies in the Old Continent and thus, generate a distortion of competition between European industries and American and Chinese industries in particular. An impact study of the implementation of the CSRD confirmed that its implementation in Germany would entail additional compliance costs estimated at 1.6 billion euros for German companies alone. This estimate has obviously been contested by environmentalists.
However, the Commission has recognized the validity of this argument and has proposed limiting the handicap of European companies by reducing their extra-financial reporting requirements by 25%. In her program, presented in November 2024, the President of the Commission reaffirmed the importance of the Paris Agreement (2015) and opened the possibility of a relaxation of the timetable for the transposition and application of the directive.
The debate has just been revived after the latest statements by the new American president, affirming his desire to withdraw the United States from the Paris Agreement and to free the American market from certain environmental and social obligations. Indeed, the ISSB (International Sustainability Standards Board) published on June 26, 2023 the IFRS S1 and S2 (Sustainability 1 & 2) standards which are applicable on a voluntary basis to financial years beginning on or after January 1, 2024 by listed companies of all nationalities, while the European Commission adopted, on July 31, 2023, the more stringent ESRS (European Sustainability Reporting Standards), whose compliance in the European Union has been made mandatory by the CSRD. The regulation of the environmental transition therefore remains under debate within the European Union.
