EU Pushes Back New ESRS Standards

The EU Parliament and the EU Council have issued a revised Corporate Sustainable Reporting Directive (CSRD), essentially extending the deadline for adopting the new European Sustainability Reporting Standards (ESRS) to June 2026, two years from its original date.

The current ESRS came into force in January 2024; however, its impact on corporate climate disclosures will be observed from the following year, when data for 2024 will be reported. The new ESRS covers both EU and non-EU companies and mandates that companies disclose information pertaining to the environmental impact of their general activities and activities linked to energy output and consumption, as well as the risks posed by environmental issues to the company. Moreover, certificates such as guarantees of origin (GOOs) and renewable power purchase agreements are the only methods of documentation recognized to indicate the use of renewable energy.

The new ESRS will likely increase the purchase of GOOs over time, although data show that there was an oversupply of certificates in January.