CSRD is transposed into Belgian law

On 28 November 2024 the Belgian parliament approved the legislation transposing the EU Corporate Sustainability Reporting Directive (“CSRD”) into Belgian Law. In a nutshell, the CSRD framework introduces a comprehensive reporting framework on sustainability information and represents a giant step forward compared to the current (and limited) non-financial reporting regime under the Non-Financial Reporting Directive. 

The new CSRD rules will gradually be phased in accordance with a staggered timeline, with an increasing number of undertakings coming into scope:

(i) as from FY 2024, large European public-interest entities (>500 employees) and large listed third-country undertakings (>500 employees);

(ii) as from FY 2025, large undertakings who meet at least 2 out of 3 of the following criteria:

• a balance sheet total of EUR 25,000,000;
• a turnover of EUR 50,000,000;
• 250 employees.

(iii) as from FY 2026, listed SMEs (with a possible opt-out until 2028);

(iv) as from FY 2028, non-EU parent companies with a combined group turnover in the EU of more than EUR 150 million. 

With the implementation of CSRD, companies in scope are required to include and disclose certain sustainability information in their annual report. Broadly speaking, the annual report must encompass details about a company's impact on sustainability issues and how these issues influence the company's further development, performance, and financial standing.

The Belgian legislation transposing CSRD integrates the requirements of CSRD into Belgian law with the addition of some (limited) gold-plating. Particularities include, amongst others:

• Restricted disclosures: the disclosure of certain information may be withheld when that information significantly harms the commercial interests of the company.
• Sanctions: If a breach occurs, the officers, agents, directors, and auditors of the relevant companies may be subject to fines between EUR 50 and EUR 10,000 (to be increased in accordance with Belgian penal law rules) when acting with full knowledge of the facts. Furthermore, if the breach was committed with fraudulent intent, sanctions may also include imprisonment for a period ranging from one month to one year.

The impact of CSRD on companies that are in scope should not be underestimated. Preparing, assessing and validating the CSRD approach requires input from various roles and teams within the organization and is time-consuming. It is therefore important to treat CSRD compliance as a priority topic and start preparing in a timely manner.