Obligation to provide information on sustainability aspects and new rules for companies with more than 250 employees
Starting in 2024, stricter reporting standards will be introduced for companies in the areas of the environment, corporate governance and working conditions. In Germany, this will affect around 15,000 companies and in Austria, the number of companies that will have to report on sustainability measures from 2025 will increase from 90 to around 2,000. In the EU, the number will rise from 11,000 to around 50,000.
Who has to prepare a sustainability report?
- Large listed companies are already obliged to prepare sustainability reports in accordance with the Corporate Social Responsibility Directive (CSRD).
- Die Definition eines „großen Unternehmens“ basiert auf bestimmten Kriterien, darunter ein Nettoumsatz von 40 Millionen Euro, eine Bilanzsumme von 20 Millionen Euro oder mindestens 250 Beschäftigte im Durchschnitt des Geschäftsjahres.
- From 2026, companies with 250 employees or more will be obliged to prepare an annual sustainability report, regardless of their capital market orientation – i.e. not only stock corporations but also limited liability companies, among others.
- From 2026, listed SMEs, small and non-complex credit institutions and captive insurance companies will also have to submit annual sustainability management reports, with an opt-out option until 2028.
- From 1 January 2028, non-EU companies will be obliged to submit a sustainability report if their turnover in the EU is more than 150 million euros and they have at least one subsidiary or branch office in the EU.
What is the Corporate Sustainability Reporting Directive (CSRD) and what does it entail?
A sustainability report provides insights into companies’ efforts with regard to sustainable business practices, including environmental risks such as climate change and social responsibility. These reports are important from a legal, ethical and ecological perspective, as they make opportunities and risks in the area of ESG transparent and appeal to investors and customers.
The EU taxonomy, which promotes environmental goals such as climate action and the circular economy, is linked to sustainability reporting. It aims to channel investments into sustainable projects.
The Corporate Sustainability Reporting Directive (CSRD) reforms the previous regulations on sustainability reporting and expands the group of companies subject to reporting requirements. Large listed companies already have to issue reports on these topics, but the CSRD extends reporting to a broader group.
Die Corporate Sustainability Reporting Directive (CSRD) wurde am 14.12.2022 in der Europäischen Union veröffentlicht, um nachhaltige Standards zu fördern und die Harmonisierung der Nachhaltigkeitsdaten zu gewährleisten. Die CSRD erweitert die bestehende Richtlinie über nichtfinanzielle Berichterstattung von 2014 und verpflichtet große Unternehmen zur Berichterstattung über Umwelt, soziale Themen, Menschenrechte und Governance. Einheitliche europäische Berichtsstandards und das Prinzip der doppelten Wesentlichkeit werden eingeführt, ebenso wie eine Prüfungspflicht für Nachhaltigkeitsberichte und die Veröffentlichung in digitalem und maschinenlesbarem Format.
Non-European companies with a significant presence in the EU must prepare consolidated sustainability reports, either in accordance with EU reporting standards or equivalent standards. Subsidiaries are excluded from the obligation if they are included in the parent company’s consolidated annual report.
Do sustainability reports have to be translated?
In terms of translating sustainability reports, this often depends on the requirements of the countries where the company operates or is listed. If a company conducts its business in different countries or is listed on stock exchanges in different countries, it may be necessary to translate the report into the respective countries’ official languages to ensure that the information is understandable for the relevant stakeholders.
We will be happy to advise your company on relevant target languages and to take on the professional translation of your sustainability reports. Our team in Vienna has the relevant experience, and we already translate sustainability reports and corporate sustainability documents for several clients from the insurance (UNIQA), energy (OMV), real estate (SIGNA) and automotive (Porsche) sectors. Contact us or get in touch with your contact person.
