{"id":13150,"date":"2025-02-28T09:50:13","date_gmt":"2025-02-28T09:50:13","guid":{"rendered":"https:\/\/axevera.com\/?p=13150"},"modified":"2025-02-28T09:52:58","modified_gmt":"2025-02-28T09:52:58","slug":"simplification-of-csrd-csddd-and-cbam","status":"publish","type":"post","link":"https:\/\/axevera.com\/en\/2025\/02\/28\/simplification-of-csrd-csddd-and-cbam\/","title":{"rendered":"Simplification of CSRD , CSDDD, and CBAM"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">The <strong>European Commission<\/strong> has recently presented a series of proposals to simplify the <strong>CSRD (Corporate Sustainability Reporting Directive)<\/strong>, <strong>CSDDD (Corporate Sustainability Due Diligence Directive)<\/strong>, <strong>EU Taxonomy<\/strong>, and <strong>CBAM (Carbon Border Adjustment Mechanism).<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The main objective of these proposals is to reduce the complexity of EU requirements for all businesses, with a particular focus on <strong>SMEs and smaller large companies<\/strong>. The new regulatory framework will concentrate on larger companies, which have a greater impact on the climate and the environment, while ensuring that all businesses have access to sustainable financing for their <strong>decarbonization transition.<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"768\" src=\"https:\/\/axevera.com\/wp-content\/uploads\/2025\/02\/Blue-Monochromatic-and-Modern-Problem-and-Solution-Table-Graph-3.png\" alt=\"\" class=\"wp-image-13162\" srcset=\"https:\/\/axevera.com\/wp-content\/uploads\/2025\/02\/Blue-Monochromatic-and-Modern-Problem-and-Solution-Table-Graph-3.png 1024w, https:\/\/axevera.com\/wp-content\/uploads\/2025\/02\/Blue-Monochromatic-and-Modern-Problem-and-Solution-Table-Graph-3-300x225.png 300w, https:\/\/axevera.com\/wp-content\/uploads\/2025\/02\/Blue-Monochromatic-and-Modern-Problem-and-Solution-Table-Graph-3-768x576.png 768w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">CSRD: Scope Reduction and Greater Flexibility<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">1. Reduction in the Number of Companies Required to Report<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">One of the main changes concerns the <strong>80% reduction in companies subject to reporting obligations<\/strong>. Only large companies with <strong>more than 1,000 employees<\/strong> and with a turnover <strong>exceeding \u20ac50 million<\/strong> or a balance sheet total of more than <strong>\u20ac25 million<\/strong> will be required to report sustainability information.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Companies that are no longer subject to CSRD can adopt the <strong>VSME<\/strong>, the <strong>voluntary sustainability standard for SMEs and smaller large companies developed by EFRAG<\/strong>. This will allow small and medium-sized enterprises to choose a reporting approach that is proportionate to their size and operational capacity.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">2. Elimination of Sector-Specific Standards<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">To avoid an excessive burden of mandatory data, the Commission has decided <strong>not<\/strong> to introduce additional <strong>sector-specific standards<\/strong>, thus simplifying the reporting process and reducing compliance costs.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">3. No &#8220;Reasonable&#8221; Audit Review, Only Limited Assurance<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">To contain verification costs, only <strong>limited assurance<\/strong> will be required, without the possibility of an increase to a &#8220;<strong>reasonable<\/strong>&#8221; review in the future. This significantly reduces financial burdens for businesses.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">4. Reduction of Mandatory Data Points in ESRS<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The <strong>European Sustainability Reporting Standards (ESRS)<\/strong> will be simplified with fewer mandatory data points, greater emphasis on quantitative data, and less descriptive narrative.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">5. Possible Postponement of the Second and Third Implementation Waves<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">To avoid unnecessary costs, the Commission has proposed to <strong>postpone<\/strong> the entry into force of the second and third waves of CSRD <strong>by two years<\/strong>, allowing companies more time to adapt.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The obligations will now start <strong>in 2028<\/strong> for financial periods beginning on January 1, 2027.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Companies may still start <strong>voluntary <\/strong>reporting <strong>from 2026<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">6. Limitations on Value Chain Reporting<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Companies subject to CSRD will no longer be required to request extensive sustainability data from <strong>suppliers and partners in their value chain<\/strong>. Instead, they will be limited to collecting only essential and relevant information, avoiding disproportionate requests that could burden SMEs within their supply chains.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Greater Flexibility in the Use of the EU Taxonomy<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The obligation to report under the <strong>EU Taxonomy<\/strong> becomes <strong>optional<\/strong> for companies with more than <strong>1,000 employees<\/strong> and a turnover <strong>below \u20ac450 million<\/strong>. This further reduces compliance costs for many businesses and allows for greater autonomy in managing reporting.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Materiality Threshold:<\/strong> If an activity represents less than 10% of a financial parameter (e.g., turnover), it will be considered irrelevant and will not be subject to taxonomy assessment.<\/li>\n\n\n\n<li><strong>Refined Do No Significant Harm (DNSH):<\/strong> Compliance is facilitated in areas such as pollution and chemical use.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">CSDDD: Reduction of the Burden on Businesses<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">1. Reduced Frequency of Periodic Monitoring<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Companies subject to CSDDD will have to conduct <strong>less frequent monitoring<\/strong>, reducing complexity and compliance costs.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Risk assessments every five years instead of annually.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Clearer guidelines by mid-2026.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">2. More Targeted Obligations for Indirect Business Partners<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Companies will need to focus due diligence on <strong>direct business partners<\/strong>, while obligations toward indirect suppliers will only apply if there is evidence of adverse impacts.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Carbon Border Adjustment Mechanism (CBAM): Greater Simplification<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Exemptions for Small Importers:<\/strong> Importers who bring in less than 50 metric tons of regulated goods per year will be exempt from CBAM. This excludes about 90% of companies, while still covering 99% of targeted emissions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Simplified Compliance:<\/strong> Reduced CBAM costs for imports from countries with existing CO2 pricing mechanisms.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>New Anti-Abuse Measures:<\/strong> Coordinated strategies with national authorities will be introduced to prevent fraud and misuse of CBAM.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>CBAM Review:<\/strong> A comprehensive review is planned by the end of the year, with the possibility of extending the mechanism to other ETS sectors, processed goods, and indirect emissions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Support for Exporters at Risk of Carbon Leakage:<\/strong> Measures will be studied to protect European companies exporting CBAM products to markets where the risk of carbon leakage is high.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>New Legislative Proposals:<\/strong> In 2026, the Commission will present further regulatory updates to make CBAM more effective and targeted.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Impact on SMEs and Benefits of Simplification<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The changes to CSRD and CSDDD significantly reduce the risk of a &#8220;trickle-down effect&#8221; on SMEs. Smaller businesses, which are no longer subject to reporting obligations, will be able to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Use the VSME standard to voluntarily provide sustainability information.<\/li>\n\n\n\n<li>Avoid excessive data requests from large clients, thanks to regulatory protections against disproportionate obligations.<\/li>\n\n\n\n<li>Benefit from greater competitiveness, avoiding excessive compliance costs and focusing on growth and innovation.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Conclusions<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The new proposals from the European Commission represent an important step towards regulatory <strong>simplification <\/strong>for European businesses. However, <strong>EU competitiveness<\/strong> does not depend solely on reducing bureaucracy but also on strong support for <strong>innovation<\/strong> and investment in strategic sectors such as artificial <strong>intelligence and venture capital.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While it is essential to simplify procedures for startups and foster a dynamic market, it is equally crucial <strong>to maintain sustainability standards<\/strong> to ensure balanced and <strong>responsible growth. <\/strong>The green transition and transparency in environmental data are key elements for the future of European businesses, allowing the creation of a competitive system based on innovation and sustainability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Europe must continue investing in <strong>its core values<\/strong>: high quality of life, excellent public healthcare, advanced education, and collaboration between diverse markets. The future of the EU depends on its ability to balance economic growth with environmental responsibility, <strong>without sacrificing<\/strong> its leadership in the <strong>decarbonization transition.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">AI-generated image.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sources: <a href=\"https:\/\/finance.ec.europa.eu\/document\/download\/161070f0-aca7-4b44-b20a-52bd879575bc_en?filename=proposal-directive-amending-accounting-audit-csrd-csddd-directives_en.pdf\">161070f0-aca7-4b44-b20a-52bd879575bc_en<\/a>, <a href=\"https:\/\/taxation-customs.ec.europa.eu\/news\/cbam-new-commission-proposal-will-simplify-and-strengthen-2025-02-26_en\">CBAM: new Commission proposal will simplify and strengthen &#8211; European Commission<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The European Commission has recently presented a series of proposals to simplify the CSRD (Corporate Sustainability Reporting Directive), CSDDD (Corporate Sustainability Due Diligence Directive), EU Taxonomy, and CBAM (Carbon Border&#8230;<\/p>\n","protected":false},"author":5,"featured_media":13151,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[525],"tags":[],"yst_prominent_words":[],"class_list":["post-13150","post","type-post","status-publish","format-standard","has-post-thumbnail","category-en"],"_links":{"self":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/13150","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/comments?post=13150"}],"version-history":[{"count":3,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/13150\/revisions"}],"predecessor-version":[{"id":13166,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/13150\/revisions\/13166"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/media\/13151"}],"wp:attachment":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/media?parent=13150"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/categories?post=13150"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/tags?post=13150"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/yst_prominent_words?post=13150"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}