The European Union’s Corporate Sustainability Reporting Directive will have broad impact. Approximately 50,000 undertakings will be required to report, including thousands of U.S.-based multinationals and their EU subsidiaries. Reporting obligations for these entities will be created under EU member state national legislation adopted pursuant to the CSRD. EU member states have until June 16, 2024 to transpose the CSRD into their national laws.
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Note that when transposing the NFRD, the Belgian legislature did not adopt the balance sheet and turnover thresholds set therein for “large enterprises”. It lowered both thresholds, so that more companies have to comply with the NFRD. Bulgaria The CSRD transposition process into national law was initiated by the Ministry of Finance late 2023, and an inter-institutional working group has been formed to prepare the draft acts for the implementation. It is expected that proposals to several legal acts will be prepared, with the proposals expected to be available for consultation by the end of the first quarter of 2024. Croatia Cyprus Czechia The first phase of the implementation process has adopted a minimalistic approach; the legislative provisions correspond to the first phase of the reporting obligations under the CSRD. Further, the legislation amends the Act on auditors (no. 93/2009 Coll.) and introduces the process for the verification of sustainability reports. Denmark The Danish Financial Statements Act expands on the Sustainability Directive to encompass a wider range of organizations to ensure the specific forms of Danish companies and groups are subject to the Directive, even if not regulated by EU law.
Consultation Law Firm Held Implementing Legislation Introduced Implementing Legislation Approved Implementation Timeline2 Reporting Entities3 JurisdictionSpecific Reporting4 Other5 Estonia Finland Gold-plating in the implementation includes: 1) extension to cover co-operatives, 2) extension of digital format requirements to financial statements, and 3) publication of the sustainability report and financial statements within 6 months. France The thresholds for the definition of large companies remain €20 million for assets, and €40 million for turnover. French companies that were subject to non-financial reporting requirements, while not being public interest entities, are still required to publish a report for 2024 under the previous regime. French law also provides that limited information relating to sustainability matters not included in the CSRD or the ESRSs must be included in the management report. Germany Greece Hungary Note that the balance sheet total and net revenue thresholds are set in the implementation legislation in local currency (HUF). The EUR equivalents therefore are slightly different than what is set out in the CSRD. Ireland Thus far, there has been no indication that Ireland will impose any additional reporting requirements beyond what is contained within the text of the CSRD.
Consultations among the Government and relevant stakeholders are in process. Several market players have submitted position papers to the Luxembourg authorities. There is currently an initiative from FEDIL (a multisectoral business federation) working together with all stakeholders on questions relating to the transposition. Malta Netherlands Gold-plating is not expected. The implementing legislation, however, is expected to require an auditor to provide information on whether a subsidiary of a third country undertaking is subject to sustainability reporting obligations.
The draft legislation proposes significantly lower balance sheet, turnover and average number of employee reporting thresholds than are included in the CSRD. Slovakia Slovenia Currently, sustainability reporting is envisaged for all large, small or medium-sized undertakings whose transferable securities are admitted to trading on a regulated market in the EU. The reference to "public-interest entities" is omitted, and there are expectations of further amendments to correct this inconsistency with the CSRD.
The Directive is expected to be implemented according to a minimum approach. All new reporting obligations will, to some extent, be limited by the fact that they only apply to legal forms that are harmonized under European law, such as the public limited company (AG-Aktiengesellschaft), the private limited company (GmbH-Gesellschaft mit beschränkter Haftung) and the limited partnership (KG-Kommanditgesellschaft) and not to Liechtenstein-specific legal forms such as the foundation (Stiftung), the establishment (Anstalt), the trust and the trust enterprise. Norway Norway is an EEA member state and the obligation to implement the CSRD is therefore reliant on the EEA process. To be applicable to the EEA states, EU acts must be included in the EEA Agreement. The CSRD is currently under scrutiny by the EEA and EFTA. An overview of the EEA process can be found on https://www.efta.int/eea-lex/32022L2464. Nevertheless, the Ministry of Finance announced in March that the aim is for the rules to apply in Norway at the same time as in the EU.
