Sweep CIO Julien Denormandie on The Future of EU Regulations
The current state of the EU’s ESG regulations is uncertain, with rollbacks taking place since the February 2025 Omnibus that proposed the delay of implementation and the reduction of the scope of some key directives.
This has left members of the EU unsure of what is to come next, with directives like the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) that were put in place in 2024, potentially being renegotiated.
Julien Denormandie, Chief Impact Officer at Sweep, released a statement outlining what he thinks is next for the regulations in the EU.
He has several years of experience in government roles, including as part of the French government for more than five years.
What are the revisions that are being discussed?
There have been differences in opinion when it comes to the decision making of the EU regulations.
For the CSRD framework that the Commission has proposed to limit mandatory scope to companies with more than 1000 members of staff.
The council says it wants to add a threshold where turnover is more than US$523m (€450m).
But, Julien says the rapporteur in Parliament is proposing that a threshold of 3000 employees is more suitable.
This could mean a large reduction in the 50,000 companies involved, if following parliament's advice, mandatory companies could fall to 3,000.
Alongside this the CSRD regulations might change to be obligatory for those with more than 5,000 members of staff and a US$1.7bn (€1.5 bn) turnover.
Julien says: “Discussions are ongoing in parallel on the revision of the CSRD framework (and the CS3D) and its implementing regulation, which sets out the reporting standards (the ESRS).
“They are intense.
“The main challenge is finding the right balance between the need for reliable, comparable and useful reporting for the transition, and the desire not to impose a disproportionate administrative burden on companies.”
What is happening with the ESRS?
Europe's voice in corporate reporting (EFRAG) has been working on simplifying the 12 European Sustainability Reporting Standards (ESRS) that underpin the CSRD.
The simplification will reduce data points that need to be covered, this is open for public consultation and will be sent to the Commission to serve as the basis of the new regulations.
Julien continues “The full set of revised regulations (directives and delegated regulations) is expected to be finalised by June 2026.
“In the meantime, the rollout of the CSRD will only concern the first wave of companies subject to CSRD reporting and only for the information required for the 2024 financial year (some information was not due until 2025 or 2026).
“For the second wave, the implementation will be delayed by two years (covering data for the 2027 fiscal year instead of 2025).”
- “Stop the clock” was implemented meaning companies in wave 2 and 3 will get an extra two years before needing to abide to the regulations
- The Council of the European Union adopted its position on the Omnibus package
- Under certain conditions wave 1 companies do not need to report on some ESRS standards: biodiversity, value chain workers, affected communities and consumers and end-users
- The VSME standard has been adopted by the European Commission
What can people expect in the future?
Julien says that after Parliament adopts its position, alongside the Council and Commission the three will finalise the new CSRD regulations.
Julien concludes: “I recommend that affected companies not wait until the last minute: it’s wise to anticipate changes, train teams, engage with internal and external stakeholders and, if necessary, seek specialised advice.
“Finally, it’s important to remember that the debate on the informational value and ambition of the CSRD will continue.
“Investors, civil society and regulators will be watching very closely the quality of the first streamlined reports.”
More about Sweep
Sweep is a sustainable data management platform that aims to help businesses achieve climate goals.
Founded in 2020, based in France and the UK the company builds software that allows companies to take control of its impact on climate and society.
The business provides services such as tracking carbon data across value chains and providing advice on complying to the most recent disclosure regulations.
Rachel Delacour, Co-Founder and CEO says: “Every company is poised to disrupt the climate crisis and build a sustainable future.
“Those that take every possible action today will become the Forever Companies of tomorrow.
“Sweep provides the tools needed to tackle the complexities of sustainability data management, to accelerate climate action”.
