The Estonian Chamber of Agriculture and Commerce and the Estonian Merchants' Association have issued a joint statement, calling on other business organisations to join their proposal to postpone the deadline for ESG (environmental, social and governance) reporting obligations imposed on large companies by at least one year, and to submit a corresponding proposal to the European Commission as well.
The Estonian Chamber of Agriculture and Commerce, which together with its member organisations represents more than 30,000 legal and natural persons, and the Estonian Merchants' Association, which has 60 leading retail companies as members, take the view that, as currently designed, the application of ESG reporting requirements places an excessive burden on businesses, increases bureaucracy and entails unreasonably high administrative costs. The European Commission has already begun preparing a plan to simplify environmental, social and governance regulations, and the publication of a new harmonised omnibus regulation has been announced for 2025. It is therefore reasonable to postpone the imposition of the ESG reporting obligation, in order to ensure a smoother and more cost-effective adjustment to the new rules.
Kerli Ats, Chairwoman of the Management Board of the Estonian Chamber of Agriculture and Commerce, emphasises: "Feedback from businesses confirms that the current ESG reporting requirements are far too complex and costly. Given that the European Commission has begun planning to simplify these regulations, it is sensible to postpone the deadline for ESG reporting so that companies can adjust to the new rules more smoothly and more cost-effectively."
Nele Peil, CEO of the Estonian Merchants' Association, adds: "Compiling and auditing ESG reports comes with high costs, reaching at least 50,000 euros in the case of large companies and, for more complex systems, even hundreds of thousands of euros. The reporting obligation applies to large companies, but its effects extend to small and medium-sized enterprises too, which have to gather and pass on data for the large companies' reports, so that the impacts can be tracked and measured along supply chains."
In addition, businesses are forced to put new software solutions in place, train staff and create new processes to ensure compliance with ESG requirements. Since the European Commission is planning to simplify reporting requirements, it is important for businesses to avoid a situation where they have to keep adapting to constantly changing regulations and bear the additional costs that come with that.
The Estonian Chamber of Agriculture and Commerce and the Estonian Merchants' Association are calling on all business organisations to join this proposal in order to achieve practical and balanced solutions in the application of ESG reporting. Our aim is to reduce the administrative burden and costs on businesses, so that ESG reporting becomes a substantive obligation and not just a formal one.
For more information:
Kerli Ats, Chairwoman of the Management Board of the Estonian Chamber of Agriculture and Commerce
Nele Peil, CEO of the Estonian Merchants' Association
Contact:
Meeli Lindsaar
Estonian Chamber of Agriculture and Commerce
Head of Food Sector
Tel: 600 9349 / Mob: 5087796