Corporate Sustainability Reporting Directive

(CSRD)

Directive (EU) 2022/2464 as regards corporate sustainability reporting (CSRD)

Requiring certain companies to report on the impact of corporate activities on the environment and society

Entry into force

5 January 2023

 ESG – Approval of CSRD

2023

30 June 2023

Sustainability reporting standards

EU Commission to adopt delegated acts to provide for sustainability reporting standards. The sustainability reporting standards must specify the information that undertakings are to report in accordance with Articles 19a and 29a of Directive 2013/34/EU, known as the Accounting Directive, and, where relevant, must specify the structure to be used to present that information.

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Update 22 December 2023: Commission Delegated Regulation (EU) 2023/2772 supplementing Directive 2013/34/EU as regards sustainability reporting standards was published in the Official Journal of the EU. The Commission Delegated Regulation includes the first set of sector-agnostic European Sustainability Reporting Standards (ESRS).

In force

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Update 8 May 2024: Directive (EU) 2024/1306 amending Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings was published in the Official Journal of the EU. The Directive postpones the adoption of sector-specific ESRS and sustainability reporting standards to be used by certain non-EU companies by two years to 30 June 2026. This is to allow companies to focus on implementing the first set of ESRS and limit the reporting requirements to the minimum necessary.

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Update – Omnibus I package 26 February 2025: under its Omnibus I package, more specifically under what is known as the Content Proposal, the EU Commission proposes to remove the requirement for sector-specific reporting standards. The proposed amendment is pending with the EU co-legislators.

First Omnibus Package proposed – what is the potential impact for Luxembourg entities (28 February 2025)

Partial entry into application

1 January 2024

Amendments to Regulation (EU) 537/2014 on specific requirements regarding statutory audit of public-interest entities (known as the Audit Regulation) to apply for financial years starting on or after 1 January 2024.

2024

30 June 2024

Sustainability reporting standards for small and medium-sized undertakings

EU Commission to adopt delegated acts to provide for sustainability reporting standards that are proportionate and relevant to the capacities and characteristics of small and medium-sized undertakings (SMEs) and to the scale and complexity of their activities. These sustainability reporting standards must specify for SMEs the information that is to be reported in accordance with Article 19a(6) of Directive (EU) 2013/34/EU, known as the Accounting Directive.
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Update – Omnibus I package 26 February 2025: under its Omnibus I package, more specifically under what is known as the Content Proposal, and in line with the proposed narrowed scope of the CSRD, the EU Commission proposes to remove the requirement for reporting standards applicable to SMEs and introduce voluntary reporting standards. The proposed amendment is pending with the EU co-legislators.

First Omnibus Package proposed – what is the potential impact for Luxembourg entities (28 February 2025)

Implementation of CSRD

6 July 2024

Member States to bring into force the laws, regulations and administrative provisions necessary to comply with Article 1 (Amendments to the Accounting Directive), Article 2 (Amendments to the Transparency Directive) and Article 3 (Amendments to the Audit Directive) of the Directive.

Luxembourg implementation 29 March 2024: bill of law 8370 implementing the CSRD and Commission Delegated Directive (EU) 2023/2775 as regards adjustments of the size criteria for micro, small, medium-sized and large undertakings or groups was submitted to the Luxembourg Parliament. The bill of law is pending with the Luxembourg

Latest developments in Luxembourg’s CSRD implementation process: the final stretch? (6 November 2024)

Implementation of CSRD into Luxembourg law: expanded sustainability reporting obligations for Luxembourg and foreign undertakings (15 May 2024)

2025

As from 2025

Wave 1: first reporting for financial years starting on or after 1 January 2024

Member States to apply the measures necessary to comply with Article 1 (Amendments to the Accounting Directive) with the exception of point (14) (Reporting concerning third-country undertakings), Article 2 (Amendments to the Transparency Directive) and Article 3 (Amendments to the Audit Directive) to:

  • Large listed companies, credit institutions, insurance undertakings and public interest entities (as designated by Member States)
  • Large public interest entities
  • Listed parent undertakings of large groups (consolidated)

with the following thresholds (at least two apply):

  • Balance sheet total > EUR 25m
  • Net turnover > EUR 50m
  • More than 500 employees (mandatory).

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Update – Omnibus I package 26 February 2025: under its Omnibus I package, the EU Commission proposes to narrow the scope of reporting companies and increases the average number of employees to 1,000. This proposed amendment is pending with the EU co-legislators.

First Omnibus Package proposed – what is the potential impact for Luxembourg entities (28 February 2025)

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“Stop-the-Clock”: points to consider for Luxembourg reporting entities and groups (10 April 2025)

Implementation of Stop-the-Clock Directive

31 December 2025

Member States to bring into force the laws, regulations and administrative provisions necessary to comply with Directive (EU) 2025/794 as regards the dates from which Member States are to apply certain corporate sustainability reporting and due diligence requirements, known as the Stop-the-Clock Directive.

The Stop-the-Clock Directive postpones the dates of application of certain corporate sustainability reporting and due diligence requirements, as well as the implementation deadline of the due diligence provisions.

“Stop-the-Clock”: points to consider for Luxembourg reporting entities and groups (10 April 2025)

2026

30 June 2026

Sustainability reporting standards for third-country undertakings

EU Commission to adopt a delegated act to provide for sustainability reporting standards for third-country undertakings that specify the information to be included in the sustainability reports referred to in Article 40a of Directive (EU) 2013/34/EU, known as the Accounting Directive.

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Update 8 May 2024: Directive (EU) 2024/1306 amending Directive 2013/34/EU as regards the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings was published in the Official Journal of the EU. The Directive postpones the adoption of sector-specific European Sustainability Reporting Standards (ESRS) and sustainability reporting standards to be used by certain non-EU companies by two years to 30 June 2026. This is to allow companies to focus on implementing the first set of ESRS and limit the reporting requirements to the minimum necessary.

1 October 2026

Assurance standards for sustainability reporting (Article 26a of Audit Directive)

EU Commission to adopt delegated acts in accordance with Directive 2006/43/EC, known as the Audit Directive, in order to provide for limited assurance standards setting out the procedures that the auditor(s) and the audit firm(s)  must perform in order to draw their conclusions on the assurance of sustainability reporting, including engagement planning, risk consideration and response to risks, and type of conclusions to be included in the assurance report on sustainability reporting, or, where relevant, in the audit report.

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Update – Omnibus I package 26 February 2025: under its Omnibus I package, more specifically under what is known as the Content Proposal, the EU Commission proposes to remove the specific timeline for the adoption of these delegated acts. The proposed amendment is pending with the EU co-legislators.

First Omnibus Package proposed – what is the potential impact for Luxembourg entities (28 February 2025)

Entry into application

1 January 2028

Chapter 9a (Reporting concerning third-country undertakings) of Directive (EU) 2013/34/EU, known as the Accounting Directive, starts applying.

Omnibus I package 26 February 2025: under its Omnibus I package, the EU Commission proposes to narrow the scope for publishing of sustainability reports by third-country undertakings.

First Omnibus Package proposed – what is the potential impact for Luxembourg entities (28 February 2025)

2028

As from 2028

Wave 2: first reporting for financial years starting on or after 1 January 2027

Member States to apply the measures necessary to comply with Article 1 (Amendments to the Accounting Directive), with the exception of point (14) (Reporting concerning third-country undertakings) and Article 2 (Amendments to the Transparency Directive) to:

  • Large undertakings
  • Parent undertakings of large groups (consolidated)

with the following thresholds (at least two apply):

  • Balance sheet total > EUR 25m
  • Net turnover > EUR 50m
  • More than 250 employees (mandatory).

Directive (EU) 2025/794, known as the Stop-the-Clock Directive, postponed the application of the CSRD for Wave 2 companies by two years to 2027.

“Stop-the-Clock”: points to consider for Luxembourg reporting entities and groups (10 April 2025)

Update – Omnibus I package 26 February 2025: under its Omnibus I package, the EU Commission proposes to narrow the scope of reporting companies and increases the average number of employees to 1,000. This proposed amendment is pending with the EU co-legislators.

1 October 2028

Assurance standards for sustainability reporting (Article 26a of Audit Directive)

EU Commission to adopt delegated acts in accordance with Directive 2006/43/EC, known as the Audit Directive, in order to provide for reasonable assurance standards, following an assessment to determine if reasonable assurance is feasible for auditors and for undertakings.

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Update – Omnibus I package 26 February 2025: under its Omnibus I package, more specifically under what is known as the Content Proposal, the EU Commission proposes to remove the requirement for the adoption of a reasonable assurance standard. The proposed amendment is pending with the EU co-legislators.

First Omnibus Package proposed – what is the potential impact for Luxembourg entities (28 February 2025)

31 December 2028

Milestone

Review and reporting

EU Commission to review and report on the level of concentration of the sustainability assurance market. That review must take into account the national regimes applicable to independent assurance services providers and assess whether and to what extent those national regimes contribute to opening up the assurance market.

31 December 2028

Milestone

Review and reporting

EU Commission to assess possible legal measures to ensure sufficient diversification of the sustainability assurance market and appropriate sustainability reporting quality. EU Commission to review the measures provided for in Article 34 of Directive 2013/34/EU, known as the Accounting Directive, and assess the need to extend them to other large undertakings. EU Commission to report, accompanied by legislative proposals if necessary, to the EU Parliament and the Council of the EU.

2029

As from 2029

Wave 3: first reporting for financial years starting on or after 1 January 2028

Member States to apply the measures necessary to comply with Article 1 (Amendments to the Accounting Directive), with the exception of point (14) (Reporting concerning third-country undertakings) and Article 2 (Amendments to the Transparency Directive) to:

  • Listed small and medium-sized undertakings (SMEs) (with possibility to opt out for 2 years)
  • Small and non-complex credit institutions that are listed SMEs or large undertakings
  • Captive insurance and reinsurance undertakings that are listed SMEs or large undertakings

with the following thresholds for SMEs (at least two apply):

  • Balance sheet total < EUR 25m to > EUR 450k
  • Net turnover < EUR 50m to > EUR 900k
  • Between 250 and 10 employees

or the following thresholds for large undertakings (at least two apply):

  • Balance sheet total > EUR 25m
  • Net turnover > EUR 50m
  • More than 250 employees (mandatory).

Directive (EU) 2025/794, also known as the Stop-the-Clock Directive, postponed the application of the CSRD for Wave 3 companies by two years to 2028.

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Update – Omnibus I package 26 February 2025: under its Omnibus I package, more specifically under what is known as the Content Proposal, the EU Commission proposes to remove this group of companies from the scope of the CSRD and suggests a voluntary reporting standard as further defined by a delegated act. This standard would act as a shield by limiting the information that undertakings within the scope of the CSRD may request from companies in their value chains with fewer than 1,000 employees. These amendments are still pending with the EU co-legislators.

“Stop-the-Clock”: points to consider for Luxembourg reporting entities and groups (10 April 2025)

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First Omnibus Package proposed – what is the potential impact for Luxembourg entities (28 February 2025)

As from 2029

Wave 4: first reporting for financial years starting on or after 1 January 2028

Member States to apply the measures necessary to comply with Article 1 (Amendments to the Accounting Directive), point (14) (Reporting concerning third-country undertakings) to:

  • Third-country companies

with the following thresholds (both apply):

  • consolidated turnover > EUR 150m in the EU
  • large or listed EU subsidiary/EU branch with turnover of > EUR 40m.

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Update – Omnibus I package 26 February 2025: under its Omnibus I package, more specifically under what is known as the Content Proposal, the EU Commission proposes to narrow the scope for publishing of sustainability reports by third-country undertakings through an increase of the thresholds (i) for consolidated EU turnover from more than EUR 150m to more than EUR 450m, and (ii) for net turnover generated by the EU subsidiary/branch from more than EUR 40m to more than EUR 50m. The proposed amendments are pending with the EU co-legislators.

First Omnibus Package proposed – what is the potential impact for Luxembourg entities (28 February 2025)

30 April 2029

Milestone

Review and reporting

EU Commission to submit a report, accompanied by legislative proposals if necessary, to the EU Parliament and the Council of the EU on the implementation of the CSRD, including, inter alia:

  • an assessment of the achievement of the goals of the CSRD, including the convergence of reporting practices between Member States;
  • an assessment of the number of small and medium-sized undertakings voluntarily using the sustainability reporting standards referred to in Article 29c of Directive 2013/34/EU, known as the Accounting Directive;
  • an assessment of whether and how the scope of the provisions amended by the CSRD should be further extended, in particular in relation to small and medium-sized undertakings and to third-country undertakings operating directly within the EU’s internal market without a subsidiary or a branch on EU territory;
  • an assessment of the implementation of the reporting requirements on subsidiaries and branches of third-country undertakings introduced by the CSRD, including an assessment of the number of third-country undertakings which have a subsidiary undertaking or a branch reporting in accordance with Article 40a of the Accounting Directive, and an assessment of the enforcement mechanism and the thresholds set out in that Article;
  • an assessment of whether and how to ensure that the sustainability reports published by undertakings falling under the scope of the CSRD are accessible for those with disabilities.