At the end of 2022, a new Directive (EU) 2022/2464 of the European Parliament and of the Council (Corporate Sustainability Reporting Directive – the “CSRD”) regulating sustainability reporting was adopted. The Directive introduced more detailed reporting requirements relating to environmental and social sustainability issues, as well as human rights and corporate governance. A change in terminology has been made in this context, replacing the former term “non-financial information” with “sustainability information”.
New provisions in the Accounting Act implement an obligation to prepare a sustainability report and a consolidated sustainability report. The amendment provides a clear definition of the accounting entities which will be required to prepare a sustainability report, together with the obligatory information that the report must include.
In the first stage, the obligation to prepare a sustainability report is applied to entities that meet the following criteria:
- Business corporation;
- Public interest entity;
- It would be a large accounting entity even if it were not a public interest entity;
- An average number of 500 employees per accounting period.
These entities have an obligation to prepare a sustainability report for the financial year beginning 1. 1. 2024.
For other accounting entities, the legislation should be included in the new Accounting Act.
Published information relating to sustainability includes, among other things, a description of the company’s business model and corporate strategy, information on time-bound goals related to sustainability issues, the reduction of greenhouse gas emissions, a description of the progress.
In addition, it should include information on how the company’s administrative, management and supervisory bodies participate in the targets, a description of the risks for the company related to sustainability issues, and the company’s established policies in relation to sustainability issues.
SMEs will be allowed to simplify sustainability reports to briefer information.
These reports must be approved by an auditor or another independent verification service provider.