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Overwhelming Majority for CSRD Secured in EU Parliament

With 525 votes in favour, 60 votes against and 28 abstentions, the EU Parliament has adopted new sustainability reporting rules for large companies under the Corporate Sustainability Reporting Directive (CSRD). Applicable to nearly 50,000 companies across EU member states, the CSRD’s sustainability reporting standards will require firms to disclose data on the impact of their business operations across social and environmental themes, as well as their exposure to sustainability-related risks. The first reporting standards will be adopted by the Commission by June 2023. CSRD will apply to all large companies, whether listed on stock markets or not, the Parliament said, with non-EU companies with “substantial activity” in the EU (an annual turnover of more than €150 million) also falling under the remit. Listed SMEs will be covered, but the EU is allowing them more time to adapt to the new rules. From 1 January, 2024, large public-interest companies with over 500 employees will be required to prepare their CSRD-aligned reports to submit in 2025. The rules will be extended to large companies with more than 250 employees and/or €40 million in turnover and/or €20 million in total assets from 1 January, 2025, with reports submitted in 2026. From 1 January 2026, CSRD will be extended to cover listed SMEs and other undertakings, with reports due in 2027. However, SMEs will be allowed to opt-out until 2028, when the rules will then become mandatory. The Council is expected to adopt the proposal on 28 November, CSRD will then enter into force 20 days after that. 

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