ESG REGULATION PUBLISHED IN THE LAW BOOK

As part of the much-discussed consolidation package, an amendment to the Accounting Act has been published in the statute book, which includes a definition of a sustainability report. This is a transposition of the CSRD Directive, which enshrined non-financial reporting obligations in European law. We are talking about so-called ESG reporting.

The sustainability report will be a separate part of the company's annual report. Its content is to consist primarily of information on the company's sustainability impacts. For the purposes of this report, sustainability is understood as environmental, social, human rights, governance, employment, anti-corruption and anti-bribery issues.

However, not all companies will be required to produce a sustainability report. ESG reporting obligations will apply primarily to banks, insurance companies, pension companies, health insurance companies, companies whose shares are traded on a European regulated market or have more than 500 employees in the financial year for which ESG reporting is to be mandated.

The regulation then provides for several exemptions from the obligation to produce a sustainability report. For example, investment funds, companies that are not traded on a European regulated market or companies that are part of a multinational group from the European Union that fulfils its ESG reporting obligations will not be obliged entities.

The sustainability reporting requirements will start to apply for accounting periods beginning on 1 January 2024. The range of obliged entities should be gradually increased and ESG reporting should thus be extended to a substantial proportion of companies. However, the current legislation does not yet indicate this.