1. The Law 5164/2024:
The recent enactment of Law 5164/2024 (Government Gazette A’ 202/12-12-2024), incorporating the “Corporate Sustainability Reporting Directive” (CSRD) into domestic law, is a key milestone in the course of sustainable development of Greek companies, as it has rendered mandatory (gradually, according to the size of the companies) the submission of sustainability reports, in accordance with the European standards ESRS.
2. The Omnibus Package :
However, just a couple of months after the above crucial legislation, the European Commission, through its Omnibus package (https://omnibus.gr), has seeked to postpone CSRD reporting for two years, reduce the scope of mandatory reporting by 80% and shift toward voluntary ESG disclosures.
3. The “Stop – the –clock” Directive:
Οn 16 April 2025, Directive (EU) 2025/794, amending Directives (EU) 2022/2464 and (EU) 2024/1760 -as regards only the dates from which Member States are to apply certain corporate sustainability reporting and due diligence requirements- was published in the Official Journal of the EU. This Directive, which is known as the “Stop-the-clock” Directive, is part (“Proposal 1”) of the Omnibus Package and was formally adopted by the Council of the EU on the 14 April 2025.
This means that the implementation timelines under the CSRD and “Corporate Sustainability Due Diligence Directive” (CS3D) have changed as follows:
Α. Under CSRD
a. Wave 2 (large companies, i.e. meeting at least two of the following three conditions: i) 50+ million euros in net turnover, ii) 25+ million euros in assets, iii) 250+ employees): will now report in 2028 in respect of the 2027 financial year (i.e. a 2 year delay).
b. Wave 3 (listed SMEs, meeting at least two of the following three conditions: i) 8+ million euros in net turnover, ii) 4+ million euros assets, iii) 50+ employees): will now report in 2029 in respect of the 2028 financial year (i.e. a 2 year delay).
c. No change for Wave 1 (NFRD companies, i.e. listed companies, banks, insurance companies, and other companies designated by the national authorities as public-interest entities, with over 500 employees) and Wave 4 (non-EU companies) due to report in 2025 and 2029 respectively.
B. Under CS3D
a. Deadline for transposition postponed by a year until 26 July 2027.
b. Wave 1 (companies with more than 5.000 employees and 1,5 billion euros in turnover): will have to comply from 26 July 2028 (i.e. a 1 year delay).
c. No change for wave 2 (companies with more than 3.000 employees and 900 million euros in turnover) and wave 3 (companies with more than 1.000 employee and 450 million euros in turnover), required to comply from 26 July 2028 and 26 July 2029 respectively.
The Member States will have to transpose the above Directive into their national legislation by 31 December 2025.
The amendments to delay CSRD reporting won’t apply to companies until they are enacted by the national government of their relevant jurisdiction.
To be underlined that the “Stop-the- clock” Directive is actually only a swift agreement, providing the co-legislators with the time to agree or not on substantive changes to the CSRD and CS3D, also proposed by the Commission as part of the Omnibus package.
4. Major Business Benefits:
What companies should necessarily bear in mind is that, despite any regulatory shifts, companies should stay focused on (either mandatory or voluntary) sustainability reporting, due to the significant “business benefits” it offers, such as:
4.1. Identification of Risks and Opportunities:
According to the CSRD, in order for a company to prepare a sustainability report, it should firstly identify potential sustainability related risks and opportunities –i.e. from environmental, social or governance issues– associated with its activities. By addressing potential risks early on, companies can reduce the likelihood of negative impacts on their business operations, reputation and financial performance (ex. rise of sea level due to climate change can seriously affect the land or buildings of an enterprise/violation of human rights at the business of the sole supplier of a company, fines or greenwashing accusations can seriously impede a business). In addition, from tracing sustainability opportunities, a company can gain actual substantial benefits, such as considerable cost savings from energy efficiency, access to new green markets or competitive advantages from sustainable innovations.
4.2. Economic benefits:
In particular, implementing sustainability initiatives leads to operational efficiencies –particularly in energy usage, water consumption, waste management and raw materials usage- significantly reducing costs over time. For example, ”Walmart”, the American multinational retail store, with stores in 24 countries, has recently committed to being supplied with 100% renewable energy and has already achieved significant reductions in energy use across its stores (www.instituteofsustainabilitystudies.com).
4.3. Rising consumer demand:
Consumers are increasingly prioritizing eco – friendly products and services. A recent study by Harvard Business Review (https://hbr.org) showed that 70% of consumers avoid purchasing from companies they perceive to be unethical. Millennials and Gen Z, in particular, are leading this trend, demanding sustainability from the brands they support.
4.4. Attracting Investors:
By looking at a company’s alignment with CSRD, investors can assess the company’s commitment to sustainability and the environmental and social impact of its activities. This can help investors make more informed investment decisions and allocate their funds towards more sustainable opportunities. A recent report by Morgan Stanley Institute for Sustainable Investing (www.morganstanley.com) shows that 85% of individual investors are interested in impact or sustainable investing and that sustainable assets are expected to increase over the next two (2) years.
4.5. Technological innovation:
Innovation in sustainable technologies is rapidly accelerating. According to recent analysis of the International Energy Agency (IEA), investments in clean energy technologies, such as solar and wind, are projected to reach $4 trillion by 2030 (www.iea.org).This innovation is driven by a collaborative ecosystem of technology providers, start-ups, NGO’s and academia. In addition, according to the Capgemini Research Institute’s latest research, 67% of organizations have seen a reduction in carbon emissions due to the implementation of sustainable product design strategies, while 73% have seen an improvement in revenue growth (www.prod.ucwe.capgemini.com).
5. The fate of Omnibus Package
The coming months will determine the fate of the –whole package of- Omnibus proposal (only the “Stop-the-clock” portion already adopted, at the moment).
If Omnibus proposal is adopted, what may actually change are the regulatory obligations of the companies (terms, scope etc.) –demanded by law– regarding mandatory disclosure of sustainability information.
But, what will definitely remain intact, are the major sustainability challenges and the need for significant measures, in order to combat them –as also highly demanded by the markets (investors, consumers etc.).
So, regardless whether the law or the markets demand it, sustainability challenges should necessarily be addressed, in any case, in order to have sustainable businesses in the future.
Conclusion:
Concluding, sustainability reporting should be treated -not just as a simple, “theoretical compliance exercise”, that could be postponed (i.e. by “Stop-the-clock” Directive) but– primarily, as a valuable strategic tool for risk management and business value creation, that should necessarily be used, in order to confront the sustainability challenges “in real life”.
Thus, one thing is definitely clear:
Sustainability reporting (mandatory or voluntary) –by reflecting the readiness of the enterprises towards the sustainability challenges– can offer businesses a priceless competitive edge “in real markets”.
As characteristically underlined in a new paper published by the University of Cambridge’s Institute for Sustainable Leaders, there are actually the… physical forces (physics, chemistry, biology), interlinked with the extreme phenomena of climate change (storms, fires, rise of sea level etc.), that are –in reality- driving the economy. And “this is science –and science is science, whether you believe in it or not”! (http//www.cisl.cam.ac.uk) Therefore market transformation is absolutely inevitable and business will face a huge disruptive risk, if they fail to embrace it.
”By 2035, sustainable industries won’t be the exception –they will be the dominant forces driving the global markets. In every sector, from energy to finance, to food production, those who led the transition will be thriving, while laggards will be marginalised or extinct” (https://www.reuters.com/sustainability/boards-policy-regulation/esg-advocates-need-face-reality-markets-follow-value-not-virtue-2025-04-09).
It is that simple, as it is “pure business driven by… pure science”.
And the combination is… unbeatable!
Μaria El. Stefanaki
(LLM, Cambridge University)
ΕSG Officer
