Legal & Regulatory News

Members of the European Parliament attempt to block first set of ESRS

On 11 October 2023, over 40 Members of the European Parliament (MEPs) attempted to block the European Sustainability Reporting Standards (ESRS) Delegated Act through a motion for a Resolution.

The opposing MEPs argued that the ESRS represents a significant expansion on the existing reporting obligations for companies which will increase bureaucracy in the EU. Macroeconomic considerations were also raised such as high energy prices, inflation, increasing interest rates, complications in supply chains and logistics, since these factors are already placing a burden on companies which the MEPs felt would be increased by the introduction of a costly new reporting standard.

It was proposed that the European Commission submits a new delegated act which:

• uses a comprehensive language and introduces predefined quantitative KPIs for each item;
• significantly reduces the quantity of sustainability reporting standards;
• extends implementation for all companies and introduces voluntary, quantitative, measurable and comparable standards for small and medium-sized enterprises; and
• amends balance sheet and net turnover thresholds to account for the impact of inflation and increases the employment figures for medium-sized enterprises to 500 employees.

This motion was rejected by the European Parliament in a vote on 18 October and on the 21 October the period for objection came to an end.

Click here to read the motion for a Resolution.