Not the Time to Squeeze Companies... EU Postpones 'Signboard Regulations' One After Another

As the European Union (EU) struggles to revive its competitiveness lagging behind the United States and China, it has repeatedly postponed the implementation of major corporate regulations.

European Union flag. Photo by AP Yonhap News

The Council representing the 27 EU member states announced on the 14th (local time) that it has given final approval to the implementing law regarding the postponement of the enforcement of the 'Corporate Sustainability Reporting Directive' (CSRD) and the 'Corporate Sustainability Due Diligence Directive' (CSDDD).

The decision will take immediate effect once published in the EU Official Journal. The 27 EU member states will reflect the revised enforcement schedule in their national laws by the end of the year.

The CSRD is a regulation requiring all large companies, including non-EU companies conducting economic activities within the region, and listed small and medium-sized enterprises to regularly publish reports on their environmental and social impact activities. The CSDDD is a law that imposes obligations to prevent and remedy potential negative human rights and environmental impacts such as forced labor or deforestation throughout the supply chains of large companies, and to disclose related information. With this postponement, the two regulations will be applied sequentially starting from 2028.

This postponement decision is part of the first omnibus package announced by the European Commission on February 26, aimed at regulatory simplification. The package also includes plans to significantly reduce and adjust the scope of application of the two directives. Discussions on amendments to the laws are expected to intensify soon.

Adam Schwapka, the EU Minister in charge from Poland, which holds the EU presidency in the first half of the year, described the postponement decision as "an important first step to break bureaucracy," adding that "it will provide predictability to our companies and further enhance the EU's competitiveness."