Following agreement recently at inter-institutional level it is expected that the EU will adopt later this year the Corporate Sustainability Reporting Directive (CSRD).
The CSRD expands the EU's non-financial reporting obligations on businesses. The CSRD will apply to UK companies with securities listed on an EU-regulated market. This includes listed small and medium-sized enterprises (SMEs), except for listed micro-enterprises. In addition, the CSRD will apply to UK companies with annual EU-generated revenues in excess of €150 million and which also have either a large or listed EU subsidiary or a significant EU branch (generating €40 million in revenues). The respective EU subsidiary or branch will be responsible for publishing the CSRD reports. Finally, if an EU-based parent company must comply with the CSRD, then all its UK subsidiaries will need internally to report to the parent company using the criteria for reportability laid-out in the CSRD.
The new rules are planned to apply to the new financial year commencing on or after 1 January 2023.
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