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On April 21, 2021, the EU Commission announced the adoption of the Corporate Sustainability Reporting Directive (the CSRD) in line with the commitment made under the European Green Deal. The CSRD will amend the existing Non-Financial Reporting Directive (the NFRD) and will substantially increase reporting requirements on the companies falling within its scope in its efforts to expand the sustainability information for users. With the CSRD's enactment in January 2023 and the deadline for national transposition approaching in July 2024, companies subject to the CSRD must prepare to meet their reporting obligations.

The new rules will ensure that investors and other stakeholders have access to the information they need to assess the impact of companies on people and the environment and for investors to assess financial risks and opportunities arising from climate change and other sustainability issues. Finally, reporting costs will be reduced for companies over the medium to long term by harmonising the information to be provided.

Which Cyprus companies will be affected?

The CSRD significantly broadens the scope of companies required to report detailed ESG information in the EU. Large undertakings, defined as those exceeding €20 million in balance sheet total, €40 million in net turnover, or 250 employees, fall under its purview. Public interest undertakings, including those listed on regulated EU stock markets or designated as such by their country of incorporation, are also affected. Furthermore, the CSRD introduces reporting obligations for EU parent companies of large groups. These companies must file consolidated CSRD-aligned reports covering the entire EU group, including non-EU subsidiaries. Additionally, global corporate groups headquartered outside the EU may be subject to CSRD-aligned reporting if they generate a net turnover of €150 million within the EU and meet specific criteria. Non-EU companies with EU subsidiaries or branches must establish comprehensive reporting processes to comply with the CSRD. Furthermore, Article 48(i) permits one EU subsidiary of a non-EU parent company with multiple EU subsidiaries subject to reporting under Articles 19(a) or 29(a) to report on behalf of all such subsidiaries until 6 January 2030, easing the administrative burden during the transitional period. Different types of in-scope entities will face varying reporting requirements under the CSRD, phased in at different stages, necessitating a thorough understanding of both the scope and specific obligations of the directive for affected companies.

What is the CSRD timeline?

The implementation of the CSRD will take place in multiple stages, with different reporting deadlines for various categories of companies.

The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025. Large EU-listed companies, banking institutions, and insurance companies with over 500 employees will need to disclose for financial years beginning January 1, 2024. Companies with less than 500 employees but subject to the CSRD and other large non-EU companies listed in the EU will need to disclose for financial years beginning January 1, 2025. All listed SMEs will need to disclose from 1 January 2026.

Reporting Standards

The CSRD will introduce compulsory reporting requirements on a wide range of sustainability issues based on a “double materiality” perspective. Each perspective will need to be addressed and reported individually as well as collectively. The CSRD imposes a uniform, comprehensive reporting standard applicable across the EU known as European Sustainability Reporting Standards (the ESRS). The standards are developed in a draft form by the EFRAG, previously known as the European Financial Reporting Advisory Group, an independent body bringing together various stakeholders. The first set of ESRS was published in the Official Journal on 22 December 2023 under the form of a delegated regulation. These standards apply to companies under the scope of the CSRD regardless of which sector they operate in. They are tailored to EU policies, while building on and contributing to international standardisation initiatives.

Does the CSRD report need to be certified?

To ensure compliance with the reporting rules, an accredited independent auditor or certifier must certify the report. The certification confirms that the sustainability information produced complies with the certification standards adopted by the EU.

Next Steps

Although the new corporate sustainability reporting obligations are set to begin in 2025, many organizations need to start preparing and revising their sustainability strategies on which the reporting will be based. This is in addition to establishing methods and systems for ESG data collecting.

For more information, please contact any member of our team or reach out to This email address is being protected from spambots. You need JavaScript enabled to view it.

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