What is CSRD and who will it apply to?
Corporate Sustainability Reporting Directive (CSRD) proposal was issued by the European Commission on 21 April, 2021 with the aim to strengthen and extend the scope of sustainability reporting requirements, as currently laid out in EU Directive 2014/95/EU, also known as NFRD.
While many entities fell out of NFRD’s scope as it only applied to large public interest entities (i.e. listed companies, banks and insurance companies with >500 employees), CSRD will apply to all listed companies and all large companies meeting at least 2 out of 3 criteria:
- >250 employees;
- >EUR 20m total balance sheet assets;
- >EUR 40m net turnover.
In addition to the existing NFRD reporting requirements, CSRD details out the non-financial information to be reported and adds additional reporting requirements, including but not limited to:
- double materiality (sustainability risk, impact on society and the environment);
- disclosure of information on intangibles;
- requirement for the audit of reported information, to ensure that reported information is accurate and reliable.
Liaise with us to learn more about the new CSRD reporting requirements and what you can do to be prepared.
Should an agreement be reached early in 2022, the first set of the reporting standards could be adopted by the end of next year, and companies within CSRD’s scope would have to apply the reporting standards in 2024, covering FY2023.
Nevertheless, as the Member States expressed their concerns on the proposed timeline as too ambitious, the Slovenian Council’s Presidency prepared a compromise text, including amendments to the deadline for transposition and start of the application. This text will be discussed in the Council’s working committee on CSRD in December this year.
The final timeline will depend on the outcome of the European Parliament and Council negotiations.
Please contact us for further information on CSRD reporting.
Paul Pace Ross
Director, Tax Services
KPMG in Malta
Associate Director, Environmental, Social & Governance (ESG)
KPMG in Malta