How the EU’s last-minute delay to its sustainability directive affects U.S. companies

What’s going on with CSRD?

In early 2025, the EU Parliament hit the brakes on the Corporate Sustainability Reporting Directive (CSRD). After years of build-up, they’ve hit pause. Why? Because of growing anxiety in Brussels over whether Europe can stay competitive under the weight of all its new regulations.

The turning point came with a 2024 Competitiveness Report, led by former Italian PM Mario Draghi. That triggered a new “Competitiveness Compass” from the EU Commission, aimed at revitalizing economic growth. As part of that compass, CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD) were flagged as too burdensome.

Leaders in France and Germany piled on. French officials called CSRD “hell for companies,” while Germany’s finance minister warned it would force around 13,000 companies to track 1,000+ data points each—an especially heavy lift for small and mid-sized businesses.

In response, the EU introduced the strangely named Omnibus Proposal in February 2025 that promises two big changes:

1. Fewer companies will fall under CSRD
2. The disclosure requirements will be streamlined

To provide time to make these they’ve delayed the CSRD effective dates by two years for many companies, including U.S. firms with significant EU operations.

What this means for U.S. companies

If your company has a large EU subsidiary, CSRD originally required the subsidiary to report in 2026 for fiscal year 2025. That’s now been pushed back to 2028 (the 2029 deadline for full Group reporting remains unchanged).

To avoid juggling two different systems, many U.S. companies had decided to report at the Group level in 2026. That means a lot of teams have already spent big on:

• Double materiality assessments
• New data collection systems
• Staff training

So now what? Do you keep pouring money into something that might change again?

Our take: hit pause (but don’t hit delete)

Let’s be real: It’s unlikely that CSRD disappears entirely, but major revisions are very much on the table. That makes further investment risky. U.S. lobbying groups are also pushing back, and trade talks between the U.S. and EU could lead to a ‘lighter’ CSRD version for American companies. Uncertainty is the name of the game right now.

A smart game plan for 2025–2029

Here’s what we recommend:

• Pause further CSRD development
  Don’t invest more until the EU clarifies what the new version looks like
• Keep using what you’ve built
  If you’ve got materiality assessments or data systems in place, use them. But hold off on new rollouts or enhancements
• Stick to your existing reporting framework
  Go back to the standards your company was using before CSRD such as GRI or IFRS
• Stay tuned and stay nimble
  We expect more updates (and hopefully clarity) from the EU later this year

Here’s a suggested calendar for US CSOs navigating the CSRD delay, designed to balance prudence with preparedness through 2029.

CSRD Delay: Game Plan for 2025–2029