EU Member States now have 18 months in which to transpose the new Corporate Sustainability Reporting Directive (CSRD) into law.
Irish businesses are being urged to begin preparations for the new Corporate Sustainability Reporting Directive (CSRD) that came into force on 5 January.
Minister of State with responsibility for Company Regulation at the Department of Enterprise, Trade and Employment Dara Calleary, TD, was joined on a webinar this week by more than 500 stakeholders including members of the EU Commission, the European Financial Reporting Advisory Group (EFRAG), Chartered Accountants Ireland and officials from the Department of Enterprise, Trade and Employment.
“Shareholders, investors, and the public’s expectations have risen on what companies should be doing in the ESG arena”
Presentations covered topics such as, the overall goal of the directive, the sustainability reporting standards, how business can prepare, and the transposition process.
The directive arises from the European Green Deal’s climate change action objectives, to further enhance the disclosure by companies on climate and environmental data.
It expands the scope of the existing rules for non-financial reporting by very large companies and public-interest entities to large companies, large public-interest entities, and listed SMEs (excluding micros) on a main EU stock market.
It introduces mandatory reporting standards developed by EFRAG (European Financial Reporting Advisory Group). Companies in scope will be required to report annually in their management/directors’ report on environmental, social and governance (ESG) and human rights matters according to the EU mandatory standards.
Information reported on will require audit (assurance).
Timeline for new sustainability reporting directive
Ireland and other Member States now have 18 months to transpose the Directive i.e., mid 2024, with a view to mandatory requirements commencing for financial years on or after:
- 1 January 2024 for companies and public interest entities in scope of the existing rules (greater than 500 employees);
- 1 January 2025 for other larger companies and public interest entities (greater than 250 employees); and
- 1 January 2026 for listed SMEs, with an ‘opt out’ possible until 2028.
“Sustainability reporting offers Irish companies a chance to gain a competitive advantage in global markets,” said Minister Calleary.
“Through positive engagement and by taking proactive steps, businesses can ensure they are a step ahead of the competition.
“Shareholders, investors, and the public’s expectations have risen on what companies should be doing in the ESG arena and embracing this change in the paradigm will add value to companies in the long term.
“I strongly encourage all Irish businesses to engage with the new standards and know there are supports there to help make the transition. The Government is committed to working with businesses to ensure that our climate ambitions are met without placing undue burden on them.”