CSRD Implementation Delay: What does it mean for Sustainability Reporting?

In a recent LinkedIn post, our CSRD expert Sofie Bergdahl shed light on the Swedish government's proposal to delay the implementation of CSRD (Corporate Sustainability Reporting Directive). This move has sparked significant interest and raised questions about its potential implications. Let's delve into the details and understand what this delay could mean for sustainability reporting and, more importantly, how it may impact companies utilizing our SaaS Sustainability Management platform, SustainLab.

The Proposal of delaying CSRD implementation

On February 16th, the Swedish government officially proposed various reliefs to CSRD, a directive that the EU declared effective from January 1st of the current year. The proposal that garnered the most attention is the suggested delay in CSRD implementation until the fiscal year starting after June 30, 2024. Notably, this would exempt Swedish public companies with over 500 employees from reporting on data for the year 2024, pushing it to 2025.

This proposal has stirred some confusion among various companies, and it's essential to provide clarity. The delay proposal exclusively affects the first group of reporters, as encircled in the picture below, which instead of go into force for financial years starting from 1st of January 2024, would apply for the ones starting after 1st of July 2024 instead. The timelines for the other groups of reporters remain unchanged.

Our reflections on the CSRD delay proposal

Late proposal and ongoing preparations:

• The proposal's timing has raised concerns, especially as companies were already gearing up to report on 2024 data. Teams have been assembled, investments made, and preparations well underway. Despite the proposal's existence, many companies are proceeding with their original plans.

CSRD beyond compliance:

• While compliance is crucial, CSRD is about more than reporting; it encompasses impacts, risks and opportunities (IROs). Companies, having conducted double materiality assessments (DMAs), are eager to leverage insights for informed decision-making. Waiting an extra year may not align with their strategic goals.

Global impact on value chains:

• Companies within the Swedish value chain and those connected globally will be affected, irrespective of a Swedish delay. Other EU countries are already gearing up for reporting this year, potentially influencing stakeholders, financial institutions, and business partnerships. CSRD is shaping the competitive landscape on a broader scale.

Concerns raised regarding the proposal’s legality:

• The Swedish institute for the accountancy profession, FAR, has voiced concerns about the proposal's legality, hinting that it might contradict EU law. This uncertainty adds complexity to an already intricate situation.

Conclusion

In the realm of sustainability reporting, the recent proposal to delay CSRD implementation by the Swedish government serves as a reminder that preparation is paramount. For companies falling within the first group affected, this potential extension offers an opportunity to fine-tune their strategies and gives them the chance for a dry run. However, it's crucial to emphasize that this proposal is not set in stone, and we don’t know if the proposal will fall through, making it imperative for businesses to use this time wisely and continue gearing up for CSRD compliance. 

The clock is ticking, and uncertainties surrounding the proposal underline the importance of staying proactive. Our experience indicates that implementing CSRD takes longer than expected. At SustainLab, we understand the urgency and complexities involved in adapting to evolving sustainability regulations. As this proposal unfolds, we encourage businesses to leverage the potential extra time wisely. The road to CSRD compliance demands strategic planning, and with SustainLab by your side, we are committed to supporting your journey towards sustainable and transparent reporting practices. 

Ready to tackle CSRD compliance with confidence? Book a meeting today. Our CSRD module is designed to help your business navigate these changes effectively. Schedule now, and let SustainLab be your partner in complying with CSRD and driving sustainability forward