The rapidly evolving ESG regulations in the European Union and Poland highlight the significant challenges and compromises involved in implementing ambitious sustainability goals in practice. Companies, investors, and consumers are witnessing the clash of business expectations, political pressure, environmental protection needs, and growing public awareness.

On one hand, it is clear that sustainability is no longer a passing trend, but a concrete requirement that will shape business strategies and competitiveness in the coming years. On the other hand, more and more governments and EU institutions are trying to find a balance between environmental protection and reducing administrative burdens for businesses.

That’s why in this article, we discuss three key decisions from recent weeks that will influence how Polish and European companies plan their ESG strategies:

• The Polish Parliament adopted the “stop the clock” mechanism, providing companies with breathing room and additional time to prepare for sustainability reporting under the CSRD directive.
• The European Commission proposed a “quick fix” — a package of simplifications and deadline deferrals aimed at easing the burden on companies implementing the European Sustainability Reporting Standards (ESRS).
• The European Parliament rejected the Green Claims directive in its current form, highlighting the need for further legislative work. The directive was expected to become a key tool in combating greenwashing — the misleading presentation of products or companies as more environmentally friendly than they really are.

What do these changes mean in practice? How will they affect reporting obligations, the credibility of ESG claims, and building trust in business? And how can Polish companies prepare? Read our short summary.

“Stop the Clock” Adopted by the Polish Parliament – A Relief for Polish Companies

The Polish Parliament has passed an amendment to the Accounting Act, introducing the so-called “stop the clock” mechanism. This gives Polish companies subject to the CSRD directive the opportunity to delay the publication of their sustainability reports for the 2025 financial year.

This means that companies that began reporting in 2024 must continue to do so, while the remaining firms now have more time to prepare for this demanding process. This provides significant relief to businesses that do not yet have ESG data collection systems or verification procedures in place — making this additional time extremely valuable.

For the market, it is a signal that the Polish legislature recognizes the practical challenges associated with CSRD implementation. However, companies should not postpone their preparations until the last minute. This additional time also allows the European Commission to refine the ESRS reporting standards. Companies already reporting in 2024 must continue publishing non-financial information while awaiting new guidelines designed to bring more clarity and help apply the regulations in practice.

EU “Quick Fix” to CSRD – Simplifications and Deferrals

In Brussels, the European Commission adopted the so-called “quick fix” to CSRD, which includes a deferral of more detailed reporting requirements for large companies. According to the current ESRS rules, companies reporting non-financial information for 2024 could omit, for example, disclosures related to projected financial impacts of certain sustainability-related risks. The “quick fix,” which takes effect starting from the 2025 financial year, extends this exemption to 2025 and 2026.

According to the proposal:

• Detailed ESRS for value chain groups may be implemented up to 2 years later.
• The goal is to reduce the administrative burden, especially for mid-sized companies and those just starting to build their reporting systems.
• For many companies, this means more time to gather reliable data on their carbon footprint (including Scope 3) or biodiversity.

On one hand, this is welcome news — on the other, investors and the market still expect transparent ESG disclosures, even under simplified requirements.

Rejection of the Green Claims Directive – What’s Next in the Fight Against Greenwashing?

In early June 2025, the European Parliament blocked the latest version of the Green Claims directive, which aimed to introduce strict rules for verifying and substantiating environmental marketing claims. Although the Parliament rejected the current draft of the directive, it remains unclear whether legislative work will be completely abandoned — it is possible that the European Commission will present a revised version in its new term. Withdrawing the proposal at this stage could be inconsistent with EU law, making further legislative work more likely. Both the Parliament and the Council of the EU have expressed readiness to continue negotiations.

The aim of the Green Claims directive was to reduce greenwashing — misleading consumers with false or exaggerated claims about the environmental benefits of products and services. The final rejection of the draft means that, for now, companies will not be subject to uniform, binding rules for substantiating their environmental claims.

However, this is not the end of the fight against greenwashing. At the EU level, SFDR, the Taxonomy Regulation, and ESMA guidelines for financial institutions already apply. Meanwhile, consumers and NGOs are increasingly questioning and verifying misleading sustainability practices. In Poland, the Office of Competition and Consumer Protection (UOKiK) also oversees the validity of environmental claims and has the authority to conduct investigations and impose financial penalties for deceptive or unfair market practices. For companies, this means that even without the Green Claims directive, the risk of sanctions for greenwashing remains real.

Summary

The year 2025 clearly shows that ESG continues to evolve, balancing ambitious goals with economic pragmatism. The EU’s “stop the clock” and “quick fix” provide companies with more time but do not relieve them of the obligation to build robust reporting processes. The rejection of Green Claims is a reminder that trust and transparency remain key competitive advantages — even when formal regulations have yet to take effect. In Poland, UOKiK also ensures compliance and may intervene in misleading environmental messaging, which means businesses must remain honest and diligent in their green communications. At the ESG Institute, we support companies navigating this shifting landscape — from sustainability strategies to reporting, audits, and mitigating greenwashing risks. Together, we build credible ESG practices — based on facts, not just declarations.

Autor: Dariusz Postument (Junior ESG Specialist at ESG Institute)

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