Except for a small number of Member States, primarily France and, most recently, Sweden, the CSRD has not yet been transposed into domestic legislation, which was due by July 6th. Where do we stand?
Article proposé par Giuffrè Francis Lefebvre, filiale de notre groupe Lefebvre Sarrut.
The deadline for transposing Directive (EU) 2022/2464, the Corporate Sustainability Reporting Directive (CSRD), was last July 6th, but to date, only a few EU Member States have completed the legislative process. Most EU Member States, including all six founding members of the EU except for France, are still at the draft law stage or, in some cases, preliminary internal consultations.
This Directive represents the latest evolution in European regulations on sustainability reporting. The Corporate Sustainability Reporting (CSR) will replace the Non-Financial Declaration (NFD), which, since its implementation, has only applied to public interest entities with more than 500 employees.
The "virtuous" States include the Czech Republic, Denmark, France, Romania, Slovakia, Ireland and Sweden. Among the laggards are four of the five largest EU economies by GDP: Germany, Italy, Spain and the Netherlands.
This slow domestic implementation process is creating uncertainty for entities that need to prepare for the new requirements. They may need to adjust their internal processes, especially regarding the approval of relevant information to be included in the report.
The greatest need is felt by groups currently not subject to the NFRD, which, since its implementation, has only concerned public interest entities above certain size thresholds.
At present, the CSRD can guide new processes, but the various countries have considerable leeway in the implementation phase. This affects significants aspects such as:
- the scope of the companies involved ;
- the responsibilities of Directors regarding the new reporting obligations ;
- the entities responsible for "certification" and the related content ;
- the sanction regime ;
- coordination with any other domestic ESG obligations.
The situation in France, Germany, and Spain
As mentioned, France was the first Member State to implement the CSRD internally (Ordonnance n° 2023-1142 of December 6, 2023), with specific rules regarding the obligated entities, the responsibilities of Directors, and the sanction system.
Regarding the certification of the report, the French legislator has opened the market to independent certifiers, not necessarily coinciding with the entity responsible for auditing the financial statements. The shareholders' meeting can designate their external certifier, the "sustainability auditor".
To manage the new process internally, large listed companies must appoint a dedicated internal committee to monitor the preparation of the ESG report and the activities carried out by the auditor or independent certifier, reporting to the Board of Directors.
Similar provisions are included in the draft laws of Germany and Spain, where an ad hoc figure responsible for sustainability certication is to be introduced, with specific training paths to acquire the necessary skills.
The situation in Italy
The approval of the draft Legislative Decree (transposing the Directive) by the Council of Ministers dates back to June 10, 2024, about three months after the close of the public consultation.
The Decree was subsequently assigned to the following Committees, with a deadline for review set for July 20, 2024:
- Joint Committees II (Justice) and VI (Finance) ;
- Committee V (Budget and Treasury) ;
- Committee XIV (EU Policies).
The latter issued its favorable opinion on July 3rd, while the review activities are still ongoing for the other committees.
Once all committee opinions are collected, the Decree can be definitively approved by the Council of Ministers (with any amendments following the consultations) and then submitted for the President of the Republic's signature, before finally being published in the Official Gazette.
