The European Commission has announced a delay in the rollout of its sustainability reporting standards for non-European companies under the Corporate Sustainability Reporting Directive (CSRD), effectively pushing the compliance window for global firms, including African multinationals with operations or listings in the EU, several years further out.
The decision, communicated through a letter from the Commission to the EU’s financial regulators last week, forms part of Brussels’ broader “simplification agenda,” aimed at improving productivity and competitiveness within the bloc. It also seeks to reduce what the Commission described as “administrative overload” on companies navigating a fast-evolving ESG regulatory landscape.
The move means that the adoption of the European Sustainability Reporting Standards (ESRS) for third-country undertakings; the framework that defines how non-EU companies report environmental, social, and governance impacts, will not happen before October 2027, three years later than initially planned.
The CSRD, which came into force at the start of 2024, was designed to be one of the most comprehensive sustainability reporting regimes globally, covering more than 50,000 companies operating within the EU. Crucially, it also extended obligations to large non-European companies with significant EU operations, those with a net turnover of at least €150 million in the bloc and a subsidiary or branch generating over €40 million annually.
Under the original schedule, these companies were expected to begin reporting in 2028, using ESRS standards for “third-country undertakings.” However, the legislative process to finalize those standards, initially due by June 2024, has now been postponed twice: first to 2026, and now to beyond 2027.
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According to the Commission’s letter, the delay affects 115 legislative acts deemed “non-essential” to immediate EU policy objectives, out of roughly 430 pending follow-up measures linked to recent directives. Among these, the CSRD’s third-country reporting rules and several sector-specific standards have been temporarily deprioritized.
The delay comes as part of the Commission’s Omnibus I Initiative, a legislative package currently under debate in the European Parliament that proposes to streamline several complex sustainability and corporate governance laws, including the CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD).
If adopted, Omnibus I could significantly reshape the EU’s ESG landscape. Proposed revisions include raising the company-size threshold for CSRD applicability from 250 to 1,000 employees, and simplifying the scope of required disclosures, effectively reducing the number of firms required to report. The changes aim to cut costs for smaller and mid-sized enterprises while preserving the reporting integrity for large corporations.
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The postponement also follows months of political tension between the EU and the United States. The Trump administration has voiced strong opposition to extending EU sustainability rules to American corporations, arguing that the CSRD’s extra-territorial scope risks becoming a trade barrier. In a recent joint statement, the EU and U.S. agreed to ensure that the CSRD and CSDDD “do not pose undue restrictions on transatlantic trade.”
The deferral offers breathing space for African companies with growing exposure to European markets, particularly those in sectors such as mining, energy, agriculture, and finance that export heavily to or are listed in the EU. For firms in South Africa, Nigeria, Kenya, and Morocco that have been aligning their ESG frameworks with EU standards, the delay provides additional time to strengthen internal reporting systems, data governance, and climate disclosure mechanisms before formal compliance becomes mandatory.
Analysts suggest that this window could be an opportunity for African sustainability regulators to advance regional harmonization of ESG disclosure standards. The African Securities Exchanges Association (ASEA) and the African Development Bank have already initiated programs to align continental reporting practices with global norms, including the International Sustainability Standards Board (ISSB) framework.
While the delay reduces immediate compliance pressure, it also introduces uncertainty for companies preparing for EU market access or investment. European institutional investors, many bound by sustainable finance regulations like SFDR and the EU Taxonomy, are expected to continue demanding transparency from both EU and non-EU portfolio companies, irrespective of the official reporting timeline.
Within the EU, the postponement has sparked mixed reactions. Business associations have welcomed the easing of timelines, while environmental advocates warn that delays risk slowing corporate accountability just as climate targets tighten.
For Africa, the recalibration may hold both risks and advantages. Countries that have already adopted or aligned with EU-alike reporting systems, such as South Africa’s JSE sustainability disclosure guidance or Nigeria’s SEC sustainability rules, could strengthen their competitiveness in attracting climate finance. Others may lag if reforms stall in the absence of external regulatory pressure.
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What is clear is that sustainability reporting is not going away, only its timeline has shifted. The challenge for African firms will be to use this extended runway to embed data-driven ESG governance that stands up to both investor scrutiny and future regulation.
