Assirevi Warns of Risks in Delaying EU Sustainability Reporting and Narrowing Scope

The postponement of sustainability reporting obligations provided for by the first Omnibus Directive, approved by the European Parliament, risks generating a phenomenon of unregulated voluntary reporting, with potential negative repercussions on the quality and comparability of information provided to the market.

This is one of the most significant points of attention highlighted by Assirevi, the Italian association of statutory audit firms, on the provision that postponed the disclosure obligations by two years

“Assirevi appreciates the effort to simplify the Omnibus package. With reference to the two-year postponement, it must however be considered that many companies,” highlighted the President of Assirevi Gianmario Crescentino, “were already ready to fulfill the obligations of the CSRD directive (Corporate Sustainability Reporting Directive) and will most likely publish sustainability reports on a voluntary basis in any case, which are not uniform and lack clear regulatory references. This scenario risks creating confusion among stakeholders, undermining the comparability of data and compromising the relevance of sustainability information as a whole.”

To avoid these risks, Assirevi proposes to provide for companies that decide to prepare a voluntary reporting the application of the European Sustainability Reporting Standards (ESRS), or other ad hoc standards made available at European level for this type of reporting or even further principles that have a general and widespread acceptance at international level.

To facilitate operators in the sector, it will also be essential that the national transposition of the changes foreseen in the first Omnibus Directive occurs rapidly, so as to provide a clear regulatory framework to companies that, based on the current discipline of transposition of the CSRD in Italy, have, at present, the obligation to report starting from 2025.

Another issue that the first Omnibus directive leaves open, Assirevi pointed out, is that of the assignments already conferred to auditors by large companies required to report on sustainability from the 2025 financial year. The association recommends the adoption of a rule that freezes the start of such assignments, allowing them to be resumed starting from the 2027 financial year when the obligation will have become relevant again.

Following today’s approval, the European Parliament’s next step will be to discuss the second Omnibus Directive. This directive, while pursuing shared simplification objectives, currently provides for a significant reduction in the scope of sustainability reporting, limiting it only to large companies with more than 1,000 employees and thus reducing the number of companies required by approximately 80%.

This is a change on which Assirevi has raised reservations, underlining in particular the fact that several listed companies with a number of employees lower than the threshold mentioned above and non-labour intensive companies but with activities that impact sustainability would be excluded.

Finally, Assirevi highlights that this change would lead to the CSRD no longer being applicable – starting from 2027 – to numerous public interest entities (PIEs) with more than 500 and less than 1000 employees, currently required to report on sustainability, which have already reported for 2024 and will have to continue to do so in 2025 and 2026. In short, a downsizing that therefore appears inconsistent with the underlying objectives of the CSRD Directive.

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(Featured image by Guillaume Perigois via Unsplash)

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First published in ESG NEWS. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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