European Parliament and Council reach provisional agreement on CSRD

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22 Jun, 2022

The European Council and European Parliament have reached a provisional political agreement on the corporate sustainability reporting directive (CSRD) proposed by the European Commission (EC) in April 2021.

The objective of the proposed CSRD is to improve sustainability reporting to better exploit the potential of the European single market and to contribute to the transition to a fully sustainable and inclusive economic and financial system in line with the European Green Deal and the UN Sustainable Development Goals.

While the detailed agreed text is not available yet, the following information has been communicated through the Council and Parliament press releases:

  • The CSRD requirements will apply to large listed and non-listed EU companies (more than EUR 20 million balance sheet total / more than EUR 40 million net turnover / more than 250 employees) and listed SMEs (an opt-out would be available for SMEs during a transitional period until 2028); they would also apply to non-EU companies generating a net turnover of EUR 150 million in the EU and which have at least one subsidiary or branch in the EU.
    • There will be a gradual approach to reporting under the CSRD:
      • 1 January 2024 for companies already subject to the non-financial reporting directive;
      • 1 January 2025 for companies that are not presently subject to the non-financial reporting directive; and
      • 1 January 2026 for listed SMEs, small and non-complex credit institutions and captive insurance undertakings.
    • Reporting must be certified by an accredited independent auditor or certifier; the reporting of non-European companies must also be certified, either by a European auditor or by one established in a third country.

    Parliament and Council still need to approve the provisional agreement.

    For additional information, please see the press releases published by the two bodies on their websites:

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