The deadline for submitting the sustainability report must be postponed until an agreement is reached in the European Union

The Estonian Chamber of Commerce and Industry (ECCI) proposed to the ministries to postpone the deadline for submitting the sustainability report by two years, based on the recent proposal from the European Commission. This extension would apply to businesses that are required to submit an audited sustainability report for the first time in 2026 or 2027. The necessary changes must be made to the Accounting Act as a matter of urgency.

Confusion regarding the obligation to prepare a sustainability report
The current situation is unclear for businesses. According to the Accounting Act, approximately 300 Estonian companies should submit an audited sustainability report for the first time in 2026 or 2027.

However, on February 26, the European Commission introduced an initiative to reduce business costs and burdens related to the preparation of sustainability reports. For example, the Commission proposed to postpone the deadline by two years and to exempt companies with up to 1,000 employees from the reporting obligation.

As a result, companies are currently required by law to continue preparations for drafting their sustainability reports and bear the associated costs, even though the reporting obligation may be postponed or even abolished. Conducting such a costly "experiment" seems unjustified given other challenges businesses face.

The deadline for submitting the sustainability report must be changed urgently
The ECCI urged the Ministry of Finance and the Ministry of Climate to urgently amend the Accounting Act so that the deadline for submitting sustainability reports is postponed by two years for companies required to submit an audited sustainability report for the first time in 2026 or 2027.

This would provide businesses with the necessary certainty and clarity on how to proceed with the sustainability reporting process.

Implementing the ECCI’s proposal would allow around 300 Estonian companies to avoid unnecessary workload and costs. Additionally, postponing the deadline would have a positive impact on small and medium-sized enterprises (SMEs) that are not directly required to submit a sustainability report but must provide sustainability-related data to their business partners for their reports.

Since the European Commission, many EU member states, and various analyses have repeatedly highlighted the need to reduce the administrative burden on businesses in the EU, and given that sustainability reporting imposes a significant burden on companies, the ECCI believes that the EU is likely to reach an agreement on at least postponing the reporting deadline.

Therefore, it would be prudent for Estonia to promptly implement the necessary legislative changes at the national level to reduce the burden on businesses as soon as possible and provide them with clarity and certainty regarding sustainability reporting.