EU Parliament Approves Delay to Climate Policy Directives

EU Climate

Delays to CSRD and CSDDD Gain Parliamentary Backing

The European Parliament voted to delay the enforcement of two key sustainability frameworks: the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD). These rules were designed to strengthen corporate accountability for environmental and human rights impacts across global supply chains. However, pushback from industry groups and some member states prompted a reassessment. 

The CSRD, which took effect in 2024, required extensive emissions and energy data disclosures. The CSDDD would mandate climate risk assessments and mitigation plans for companies operating in the EU, particularly in high-impact sectors like manufacturing and resource extraction. This week's vote supports the European Commission’s proposal—part of a broader “omnibus” legislative package—to delay these mandates, providing companies with more time to prepare for compliance. Final approval is still required from the European Council, which already signaled agreement in a position adopted on March 26.

Revised Timeline Shifts Climate Compliance to Late 2020s

Under the revised plan, EU member states will have until July 2027 to incorporate CSDDD provisions into their national laws. From 2028 onward, large companies with more than 1,000 employees and €450 million in turnover will begin reporting, with smaller businesses following in 2029. The CSRD timeline is also affected. Originally requiring companies with over 250 employees to start reporting in 2026, the new proposal shifts this to 2028 for large firms and 2029 for small and medium-sized enterprises (SMEs). This staggered approach is intended to reduce administrative burdens and align reporting cycles across jurisdictions, especially as firms navigate post-pandemic financial recovery and ongoing supply chain volatility.

Scope of Reporting Narrowed as Policymakers Weigh Burden

Alongside the delay, the European Commission proposed trimming the scope of both directives to avoid over-regulation. If approved, the CSRD would apply to just 20% of companies initially targeted, dramatically reducing the volume of required disclosures. Additionally, only verified mechanisms—such as Guarantees of Origin (GoOs) and long-term Power Purchase Agreements (PPAs)—will count toward companies’ renewable energy usage.

Critics argue this weakens the policy’s original ambition. However, supporters believe it makes the directive more realistic and less disruptive to European industry, especially SMEs and manufacturers already facing high energy costs.

The Metalnomist Commentary

The EU’s decision reflects a growing tension between climate ambition and economic pragmatism. While regulatory delays may help companies stabilize after recent economic shocks, they also risk slowing investment in clean technologies. For sectors like metals and industrial materials—where long-term capital planning is essential—clarity and consistency in ESG policy timelines remain critical.