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Corporate Sustainability Reporting Directive Got Final Approval

Corporate Sustainability Reporting Directive Got Final Approval

Czech Republic
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On 28 November 2022, the Council of the European Union gave final approval on the Corporate Sustainability Reporting Directive (CSRD).

This Directive complements the Non-Financial Reporting Directive (NFRD), in particular by requiring certain entities to make mandatory disclosures on sustainability issues such as environmental, social or human rights or governance aspects.

These rules will apply gradually.The first wave of obligated entities, i.e. entities already covered by the NFRD,will be required to publish non-financial reporting in 2025, which will include information collected (already!) for the fiscal year 2024. In 2026, large companies not currently covered by the NFRD will publish non-financial reporting for the fiscal year 2025, and in 2027, publicly listed small and medium-sized enterprises will publish non-financial reporting for the fiscal year 2026.

However, all businesses should be prepared to field requests for sustainability information from their clients. Indeed, all the above-mentioned entities will progressively require sustainability information from their suppliers throughout the supply chain as part of their own obligations, indirectly "forcing" their suppliers to report on non-financial reporting, starting in 2024. It cannot be ruled out that obliged entities will give preference to more sustainable and better prepared companies in tenders for new suppliers.

The CSRD may thus surprise you twice. It will have to collect sustainability information:

- from a considerably wider range of companies, as obliged entities, will be asking their suppliers; and

- as early as 2024.

By Jana Pospisilova, Associate, JSKPONTES

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