CSRD

03 Feb CSRD

The Corporate Sustainability Reporting Directive (CSRD) is an EU directive that significantly expands the scope and nature of sustainability reporting by companies. It came into force in January 2023 and must now be transposed into national law. This directive replaces the previous ‘non-financial statement’ (which was regulated in Section 289b HGB) with the term ‘sustainability reporting’ to emphasise the equal importance of sustainability and financial reporting. The CSRD affects a wide range of companies and extends the reporting obligations for financial years from 1 January 2024.

The CSRD applies to public interest entities with more than 500 employees from 2024, all other large companies under accounting law from 2025 and capital market-oriented SMEs from 2026, unless they make use of the option to defer reporting until 2028.

The following small and medium-sized enterprises (SMEs) must report from 2028 All companies listed on the stock exchange, small and non-complex credit institutions and captive (re)insurance companies: Micro-enterprises, which are defined as companies that fulfil at least two of the three characteristics on the balance sheet date, are exempt: Balance sheet total: max. € 450,000 Net sales: max. € 900,000 Average number of employees during the financial year: max. 10 (criteria apply to financial years beginning on or after 1 January 2024) Note: On 17 October 2023, the European Commission published a delegated directive to amend the size criteria for small and medium-sized enterprises (SMEs) set out in Directive 2013/34/EU. As the CSRD refers to this directive when defining the scope of application (see Art. 5 para. 2), the adjustment of the thresholds also has a direct impact on the scope of application of the CSRD. These have already been taken into account in the two euro values, see https://ec.europa.eu/transparency/documents- register/api/files/C(2023)7020_0/090166e502fb401b?rendition=false