ESG – Approval of CSRD

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On 28 November 2022, the Council of the EU formally approved the Directive amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU as regards corporate sustainability reporting (“CSRD”).

1. Aim

The EU Commission presented the proposal for the CSRD in April 2021. The CSRD aims to strengthen the existing rules on non-financial reporting, which were added to amended Directive 2013/34/EU on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings (“Accounting Directive”) in 2014 by Directive 2014/95/EU regarding the disclosure of non-financial and diversity information by certain large undertakings and groups (“NFRD”).

2. Key considerations

The key changes introduced by the CSRD are:

The CSRD is expected to increase the number of companies subject to mandatory non-financial reporting from approximately 12,000 to over 50,000. There are specific exemptions for certain subsidiaries.

On 23 November 2022, EFRAG announced that it had submitted the first set of draft ESRS to the European Commission, which companies within the scope of the CSRD will use for their reporting.  It is expected that the first set of standards will be formally adopted in June 2023, while the reporting standards specific to non-EU groups are expected by 30 June 2024.

Including a mandatory external assurance obligation for the reported sustainability information, to ensure that the reported information is accurate and reliable.


3. Next steps

After being signed by the Presidents of the European Parliament and the Council of the EU, the CSRD will be published in the Official Journal of the EU and enter into force twenty days later. The new rules will need to be implemented by Member States within eighteen months of the entry into force.

The new rules will apply in four stages:

Do not hesitate to contact our experts to help you meet the challenges of the constantly evolving ESG framework.

To read the Directive of the European Parliament and the Council of the EU as regards corporate sustainability reporting (CSRD), click here_

Download the press release

Luxembourg Newsflash – ESG – Approv of CSRD

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