ESG reporting deregulation to reduce costs for Polish and European companies

The European Commission has announced exemptions from ESG reporting requirements for more than 80% of companies, significantly reducing the regulatory burden. This decision is expected to bring substantial financial relief, with Polish companies projected to save nearly PLN 500 million in compliance costs. The number of Polish businesses required to report ESG metrics will decline from approximately 3,500 to 500.

At a European Commission conference, Commissioners Valdis Dombrovskis and Maria Luis Albuquerque presented the Omnibus package, which introduces significant ESG reporting deregulation. Under the proposed changes, only the largest companies will remain subject to reporting obligations, reducing the number of businesses covered by the Corporate Sustainability Reporting Directive (CSRD) across the EU from 50,000 to 10,000.

Analyses from Personnel Service indicate that the cost of ESG reporting has been a considerable expense for companies. The Chamber of Commerce of Central Europe estimates that businesses spend an average of EUR 40,000 (approximately PLN 164,000) on compliance. If all 3,500 Polish companies previously required to report had continued under the directive, total costs would have reached PLN 574 million. With the revised regulations, reporting expenses will decrease to PLN 82 million, resulting in estimated savings of PLN 490 million for Polish businesses.

Krzysztof Inglot, founder of Personnel Service, noted that easing ESG reporting obligations represents a financial relief for businesses already facing rising operational costs. While acknowledging the benefits of deregulation, he emphasized that responsible business practices should remain a priority and that reporting regulations should align with companies' capabilities.

The Omnibus package still requires approval from the European Parliament and the Council before implementation. Once adopted, EU Member States will be required to incorporate the new regulations into their national legal frameworks. Additionally, the European Commission has announced plans to simplify the European Sustainable Development Reporting Standards (ESRS), further reducing compliance expenses for businesses.