Legal & Regulatory News

European Council gives final green light to CSRD

On 28 November 2022, the Council of the European Union (the Council) gave its final approval and adopted the corporate sustainability reporting directive (CSRD).

CSRD introduces more detailed reporting requirements on companies, with an aim of increasing accountability, preventing divergent sustainability standards, and easing the transition to a sustainable economy. The regulation specifically applies to all large private and listed companies that have business activities in the European Union, mandating that companies within scope report on the impact of their business activities on their own and wider stakeholder's sustainability.

The application of the regulation will take place in four stages:

• reporting in 2025 on the financial year 2024 for companies already subject to the NFRD;
• reporting in 2026 on the financial year 2025 for large 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; and
• reporting in 2029 on the financial year 2028 for third-country undertakings with net turnover above 150 million in the EU if they have at least one subsidiary or branch in the EU exceeding certain thresholds.

Following the Council's announcement, the legislative act will be published in the Official Journal of the European Union and will enter into force 20 days afterwards. The new rules will need to be implemented by EU member states within 18 months.

Click here to view the press release.