Eased sustainability reporting requirements would reduce the compliance burden on many businesses.
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Eased sustainability reporting requirements would reduce the compliance burden on many businesses.
Companies still in-scope can use potential extended timelines to refine sustainability reporting strategies.
Voluntary reporting remains a viable pathway to ESG leadership and investor confidence.
The European Union is making a significant course correction in its sustainability reporting framework, acknowledging the need for a more pragmatic and business-friendly approach. Recent proposed amendments to the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD) and EU Taxonomy Regulation reflect a broader recalibration of regulatory expectations, easing compliance burdens while maintaining core sustainability objectives.
While the EU has proposed adjusted key compliance thresholds and deadlines, the general alignment to the Green Deal objectives remains intact, ensuring that sustainability transparency and corporate due diligence obligations continue to align with this objective.
For global companies—including those in Canada and the U.S.—these proposed changes, if passed, may offer a reprieve, reducing complexity and providing additional time to adapt. As the EU finalizes these revisions, Canadian and American businesses should stay ahead by assessing whether they would remain in scope, leveraging voluntary sustainability reporting and optimizing compliance strategies.
The amendments proposed in February 2025 introduce delays, scope reductions, and flexibility in compliance measures. The proposed djustments respond to growing concerns about administrative burdens, reporting complexity, competitiveness concerns and potential unintended consequences for businesses in the EU and beyond. What do these changes mean for U.S. and Canadian companies that have operations in the EU?
These changes would significantly reduce the number of companies required to comply, alleviating concerns for midsized U.S. and Canadian businesses and providing breathing room for those still in scope.
The proposal provides businesses with greater flexibility in how they meet compliance obligations while still maintaining transparency.
These refinements reflect an EU effort to strike a balance between ambition and feasibility, ensuring that sustainability standards remain effective without imposing excessive burdens on companies, particularly those headquartered outside of Europe.
For Canadian and American businesses operating in Europe, the recalibrated CSRD and CSDDD frameworks offer several strategic advantages:
However, large Canadian and American firms will still need to comply. These companies should leverage the extended timeline to refine sustainability strategies, streamline data collection and establish internal assurance processes that align with evolving EU expectations.
Despite these adjustments, the EU has stated it remains committed to sustainability and corporate accountability. Rather than rolling back its Green Deal ambitions, the bloc is recognizing that effective regulation must balance ambition with practicality.
The revised CSRD and CSDDD frameworks reflect a more flexible, business-aligned approach that ensures sustainability remains a central corporate priority—without stifling economic competitiveness.
As the EU finalizes these revisions, Canadian and U.S. businesses should stay ahead by:
The EU’s recalibration signals a new era of pragmatism in sustainability regulation—one that businesses should view not as a retreat, but as an opportunity to build smarter, more efficient ESG reporting frameworks that align with both regulatory and market expectations.
Numerous regulations are making sustainability a larger compliance issue.
Tax incentives are one part of companies’ broader decarbonization efforts.
Training is the most common action taken toward compliance, but also the top hurdle.
At RSM, we guide companies through every step of their ESG journey, from assessing current practices to integrating ESG metrics into corporate decisions. We offer ESG services, including regulatory compliance, risk assessments, and reporting. Additionally, we provide internal audits to help ensure accurate ESG data collection and compliance with global regulations.
Learn more about each of our unique sustainability and ESG consulting services:
As companies develop their ESG profiles, they often find that ESG and sustainability outcomes align with broader business objectives. Tax benefits can connect business growth with positive ESG outcomes.
Our ESG tax professionals can help you align your ESG and growth goals with tailored strategies. With a presence in over 120 countries, we offer global resources and local specialization to support your sustainability strategy and create long-term value for your stakeholders.
As stakeholder demand for ESG information has intensified, business responsibility has become imperative, driven by increased scrutiny and regulation. Verified data by independent assurance specialists strengthens credibility and supports strategic decision-making, while avoiding fines and reputational damage.
RSM understands how companies align with societal and regulatory shifts toward sustainability and accountability.