Shifting Sands: ESG rules paused, but business planning must continue
Mark Lumsdon-Taylor · Posted on: April 8th 2025 · read
As global sustainability regulation takes a breath, now is the moment for businesses to sharpen their focus—not loosen it.
In recent weeks, a flurry of announcements from both sides of the Atlantic has created uncertainty around the future of climate-related reporting requirements. First, the European Parliament voted on 3rd April 2025 to fast-track proposals to delay the next wave of Corporate Sustainability Reporting Directive (CSRD) obligations and the Corporate Sustainability Due Diligence Directive (CSDDD). Meanwhile, the U.S. Securities and Exchange Commission (SEC) withdrew its legal defence of climate disclosure rules, effectively putting enforcement on hold.
Some might interpret these developments as a signal to slow down. We see it differently.
At MHA, we believe this is an opportunity for businesses to plan proportionately, act wisely, and get ahead of the curve—not wait for it to bend in another direction.
What has actually changed?
In the EU: The European Commission’s Omnibus proposal, set out in February 2025, proposes to:
- Delay CSRD reporting deadlines by two years for companies in the second and third waves (to 2028)
- Postpone CSDDD transposition deadlines by one year
- Reduce mandatory reporting burdens by introducing new thresholds (1,000 employees and >€50M turnover or >€25M balance sheet)
- Limit value chain reporting to Tier 1 suppliers only
- Remove sector-specific standards and ease assurance obligations
These changes would remove approximately 80% of companies from mandatory CSRD reporting obligations, and in the CSDDD context, frequency of due diligence will shift from annually to once every five years.
The proposals also aim to harmonise requirements across CSRD, CSDDD, the EU Green Deal, EU Taxonomy, SFDR and other directives.
Put simply, the rules are being softened and postponed, not scrapped. Businesses in scope under phase one remain obligated to comply with CSRD disclosure requirements until further regulatory changes are confirmed—and those in their value chain will still be asked for data.
EU Member States which have implemented CSRD into law (such as Ireland, France) have until 31 December 2025 to amend their existing laws to bring into force the CSRD reporting delay.
In the U.S.:
The SEC’s reversal of its legal challenge to its climate disclosure rules highlights concerns around enforcement costs and intrusion. While this marks a pause, it’s not the end of the road. The direction of travel globally—towards greater sustainability accountability—remains unchanged. For some, this means cost savings and celebration; for others, it’s a moment to take stock and reassess.
What does this mean for businesses?
Whether you’re based in Ireland, elsewhere in the EU or trading internationally, the implications are clear:
- Complexity remains, but clarity is growing The IFRS Foundation’s ISSB Roadmap Tool provides a framework for jurisdictions to navigate adoption of global sustainability standards. This should encourage consistency—but will still require adaptation at local level.
- Proportionality is key Regulatory delays offer breathing room. Use it. Focus on building robust, scalable ESG data processes. Make double materiality assessments part of your core strategy. And don’t stop the due diligence work—just right-size it.
- Your supply chain still matters Even if your reporting deadlines are delayed, you may still be required to provide data to customers who are in scope. That obligation hasn’t gone anywhere.
For Chief Sustainability Officers (CSOs), the pressure has never been higher. The intensity of aligning teams, strategy and systems remains.
Add Trump’s tariffs to the mix...
The announcement of sweeping U.S. tariffs on global imports—including a baseline 10% duty on all goods and up to 54% for some countries—further complicates the situation. The impact will be felt particularly in cross-border supply chains, with increased costs, potential product shortages, and mounting geopolitical uncertainty.
For Irish exporters and multinationals operating in the U.S. market, this reinforces the need for strategic planning, scenario modelling and close alignment between finance, ESG and trade functions.
Now, for tomorrow
While the regulatory ‘clock’ may be paused, it hasn’t been thrown away. The underlying expectations of customers, investors and markets haven’t changed. If anything, they’ve grown more urgent.
We also don’t yet know what these delays mean for the EU’s long-term commitment to sustainability—or for the transparency of democratic policymaking. Businesses would be wise to keep this broader context in view.
At MHA, we advocate for a measured, proportionate response—one that matches your business’s scale and complexity, without losing momentum. Our advice is clear:
- Don’t wait to act. Delays in reporting rules should not be confused with delays in responsibility.
- Plan for scale. Build ESG systems that grow with you, and engage early with your supply chain.
- Stay informed. This remains a fast-moving space, and legislative detail is still being negotiated.
The world is still moving towards a greener, more transparent future. The pace may change—but the direction is certain.
Let’s get your business ready. Now, for tomorrow.
