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CSRD Signed into Irish Law on 5th July 2024
By Sinéad Floody ACG, 8th July 2024
What is the CSRD?
The European Union (Corporate Sustainability Reporting) Regulations 2024 have been signed into Irish law, giving legal footing to the Corporate Sustainability Reporting Directive 2022/2464/EU (CSRD).
The CSRD is a directive under EU law that requires all member states to enact domestic laws for the disclosure of companies’ environmental, social and governance impacts, and risks and opportunities arising from the same, with the aim to elevate these topics to the same level as financial reporting. This ensures that stakeholders, including investors, have the necessary information to evaluate risks associated with climate change and other sustainability concerns for informed investment decisions. The development of the Directive is in response to the European Green Deal and the EU Action Plan for Financing Sustainable Growth.
What Companies are Affected?
Under the legislation, only non-listed micro, small, and medium-sized companies are exempt from the new reporting requirements.. However, large companies and listed entities, including SMEs, will soon be required to report on these topics of sustainability.
Based on 2024 data, starting from the 2025 financial year, Public Interest Entities in the EU with a workforce exceeding 500 employees will be required to adopt the CSRD. For Public Interest Entities with a smaller team of under 500, the rules within the legislation will come into effect from the 2026 financial year, applying 2025 data.
Additionally, any company within the EU that meets or exceeds two of these criteria – a staff count over 250, a turnover greater than €40 million, or total assets of more than €20 million – will need to ensure compliance by the 2026 financial year, based on the previous year’s data. Some companies may now find themselves in a smaller size bracket due to new changes to the Companies Act 2014, regarding company size.
EU-listed SMEs are not exempt; those with 50 to 250 employees, a turnover ranging from €8 million to €40 million, or total assets between €4 million and €20 million, will be included from the 2027 financial year, which will consider 2026 data. However, companies of a ‘micro’ size are exempt.
Finally, non-European companies that generate a net turnover of €150 million within the EU, and either have at least one subsidiary within the CSRD’s scope or an EU branch with a turnover of €40 million, will be expected to adhere to the Directive by the 2029 financial year, based on 2028 data.
How to Implement
To adhere to the Directive, you should first determine whether your company is in scope for the CSRD. Look at your company’s size in terms of employees, turnover, assets, and if it is listed on a stock exchange.
Companies that fall within the scope of the CSRD will need to include a section in their annual directors’ report detailing their performance and practices concerning environmental, social, governance, and human rights issues. This will be in accordance with the compulsory European Sustainability Reporting Standards. In-scope companies should take note of the phased implementation of the CSRD and consider how it affects them in practice.
If you have any questions regarding the Corporate Sustainability Reporting Directive or any other corporate compliance requirements, please do not hesitate to get in touch! Contact the Company Bureau team at +353(0)1 6461625 or fill out our online contact form.
Disclaimer: This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change
