After the European Parliament adopted the Corporate Sustainability Reporting Directive (CSRD) on 10 November 2022, the Council of the European Union has now given the final green light.
On 28th November, the Council of the EU adopted the Corporate Sustainability Reporting Directive (CSRD), taking the EU a step closer to its climate neutrality goal.
The CSRD will amend the Non-Financial Reporting Directive to introduce more detailed reporting requirements in respect of sustainability issues such as environmental rights, social rights, human rights and governance factors. The CSRD will oblige in scope companies to disclose information on their societal and environmental impact connected with their own operations and with their value chain.
Application of the CSRD
The CSRD will apply on a phased basis:
- reporting in 2025 on the financial year 2024 for companies already subject to the NFRD;
- reporting in 2026 on the financial year 2025 for companies that are not currently subject to the NFRD;
- reporting in 2027 on the financial year 2026 for listed SMEs except micro undertakings, small and non-complex credit institutions and captive insurance undertakings. An opt-out will be possible for in scope SMEs for the first two years; and
- reporting in 2029 on the financial year 2028 for in scope third-country undertakings.
The CSRD will affect approximately 50000 companies, including:
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EU Large undertakings (listed or not), whose securities are admitted to trading on a regulated market in the Union.
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Large public-interest companies (with over 500 employees) already subject to the non-financial reporting directive.
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Small and medium-sized undertakings, except micro undertakings, whose securities are admitted to trading on a regulated market in the Union.
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Third-country undertakings whose securities are admitted to trading on a regulated market in the Union.
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Third-country undertakings which have significant activity on the territory of the Union which generate more than EUR 150 million net turnovers in the EU (for each of the last two consecutive financial years) and that have at least one EU subsidiary (large or listed on an EU regulated market) or EU branch (more than EUR 40 million net turnovers in the preceding financial year).
Please click to see the press release announcing it on the Council’s website.
