EU lawmakers back delay to sector-specific ESG corporate disclosures to 2026

FILE PHOTO: Flags flutter outside of the European Parliament in Strasbourg

By Huw Jones

LONDON (Reuters) - European Union lawmakers on Wednesday backed a two-year delay in sector-specific rules for the oil, energy and mining industries, to make more detailed disclosures on environmental, social and governance (ESG) factors, citing the need to ease regulatory burdens on companies.

The European Parliament's legal affairs committee approved a draft proposal from the European Commission to delay eight sector standards by two years until June 2026. EU member state approval is also needed.

The sectors cover oil and gas, mining, road transport, food, cars, agriculture, energy production and textiles.

The aim is to give companies time to focus on implementing initial, broader ESG disclosures they must include in their annual reports for 2024 and onwards under the EU's corporate sustainability reporting directive (CSRD).

The delay follows an announcement by EU financial services commissioner Mairead McGuinness last year that she had asked the EU executive's corporate reporting advisory body EFRAG to prioritise implementing CSRD before working on the sector standards.

It is the latest sign of how climate-related rulemaking is facing some pushback in the EU after a welter of legislation, echoing a larger backlash in the United States, as policymakers seek to ease red tape on companies to boost growth.

"We will delay the deadline for sector specific standards under the Corporate Sustainability Reporting Directive (CSRD) by two years in order to give EFRAG the time to develop quality standards and give companies the time to put them into practice," said Axel Voss, a German member of the centre-right EPP party.

"Companies have been putting up with too much bureaucracy in years of crisis, from Covid to inflation."

The EPP party has called for a moratorium on new climate-related rules as the European Parliament readies for elections in June.

(Reporting by Huw Jones; Editing by Sharon Singleton)