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France Pushes for Major Delays and Revisions to CSRD and CSDDD Requirements
In a document obtained by POLITICO and dated January 20, France outlined its proposals to indefinitely delay the Corporate Sustainability Due Diligence Directive (CSDDD) and to push back the implementation of the Corporate Sustainability Reporting Directive (CSRD), two cornerstone EU sustainability initiatives. The submission highlights concerns over the bureaucratic burden these regulations impose, particularly on small and medium-sized enterprises (SMEs). This move aligns with Germany’s earlier requests to delay the CSRD, reflecting growing concerns about the regulatory burden on businesses.
France’s Push for CSRD Delays
In a recent submission to the European Commission, France proposed postponing the implementation of the CSRD by two years for smaller businesses and indefinitely delaying the CSDDD. The French government argues that the current requirements place an excessive burden on small and medium-sized enterprises (SMEs) and mid-sized companies.
Key changes proposed by France include:
Raising the Reporting Thresholds: Apply CSDDD requirements only to companies with more than 5,000 employees and revenues exceeding €1.5 billion.
Simplifying Reporting Indicators: Drastically reduce the number of indicators companies must report on, with a sharper focus on climate-related objectives.
Transition Plan Revisions: Clarify that transition plans under the CSRD should compare targets to the Paris Agreement rather than mandate alignment with it.
Sector-Specific Reporting Pause: Halt sector-specific reporting obligations under the CSRD.
The French economy minister, Eric Lombard, emphasized the need for regulatory simplification, stating, “We need to focus on legislation that complicates the daily lives of companies and slows down their growth.”
Echoing Germany’s Concerns
France’s proposals mirror Germany’s recent request for a two-year delay in CSRD implementation and reductions in reporting content. Both countries highlight the heavy bureaucratic burden imposed on businesses, with over 13,000 companies in Germany alone set to be impacted by the CSRD starting in 2026.
The French government’s submission also calls for greater synchronization and simplification across EU sustainability regulations, including the CSRD, CSDDD, and EU Taxonomy. This echoes concerns expressed by German officials and French President Emmanuel Macron, who stated, “We need to make a massive regulatory break to review regulations hampering our ability to innovate.”
The Case Against Overregulation
One of the most contentious issues highlighted by France is the impact of stringent regulations on European competitiveness. According to the submission, “A simple and predictable regulatory environment, particularly for SMEs, is crucial for promoting investment projects in the EU.”
French officials argue that the regulatory complexity of the CSRD and CSDDD creates administrative hurdles, impeding innovation and investment. The call for simplification is part of a broader push for “regulatory pauses” to allow businesses the time and flexibility to adjust to new rules.
Industry Reactions
France’s proposals have sparked mixed reactions across the EU. While some stakeholders welcome the push for simplified reporting, others warn that delaying the CSRD and CSDDD could undermine Europe’s ESG goals.
The European Fund and Asset Management Association (EFAMA), for example, expressed concerns that scaling back reporting obligations would reduce the availability of sustainability data, making it harder for investors to meet their own reporting requirements under the Sustainable Finance Disclosure Regulation (SFDR).
EFAMA stated, “Sustainability reporting by investee companies guides asset managers’ sustainable investments. Without available CSRD data, asset managers are reliant on ever more expensive ESG data and ratings from third-party providers.”
What’s Next for EU Sustainability Rules?
France’s proposals come as the European Commission prepares to unveil its omnibus initiative on February 26. This review aims to simplify EU regulations, including the CSRD and CSDDD, and may include some of the changes advocated by France and Germany.
As discussions continue, the balance between reducing regulatory burdens and maintaining robust sustainability reporting standards will be central to shaping the future of Europe’s ESG landscape.
For a detailed overview of France's proposals to simplify EU regulations, you can refer to the official submission by French authorities here.
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