The European Commission has published its 2024 Work Programme outlining its initiatives for the months ahead, including proposals associated with reporting requirements.

ESRS

The Work Programme includes proposals to delay the adoption of further European Sustainability Reporting Standards (ESRS) under the Accounting Directive, as amended by the Corporate Sustainability Reporting Directive (CSRD):

• Sector-specific ESRS are to be adopted by 30 June 2026 (instead of 30 June 2024); and
• ESRS for non-EU companies (within scope of the CSRD) are to be adopted by 30 June 2026 (instead of 30 June 2024).

As noted in our recent update, EFRAG will initially focus on sector-specific ESRS for “high-impact” sectors and for financial institutions, in addition to ESRS for SMEs.

Adjusted Size Criteria

The Work Programme includes a proposal to adjust the size criteria (balance sheet and net turnover) for micro, small, medium-sized and large companies under the Accounting Directive, in order to reduce reporting requirements.

The European Commission has now adopted the delegated directive adjusting the size criteria under the Accounting Directive (for more, see our recent update).  The revised thresholds apply for financial years commencing on or after 1 January 2024, but member states have the option of allowing companies to apply the adjusted size criteria for financial years commencing on or after 1 January 2023.

The increased thresholds will reduce the volume of companies and groups within scope of sustainability reporting obligations under the Accounting Directive as amended by the CSRD, and under Article 8 of the Taxonomy Regulation.