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NFRD Requirements Extending to Non-Public Companies in 2025.

The Corporate Sustainability Reporting Directive (CSRD), which now includes the disclosure requirement under EU Taxonomy rules, was published in the Official Journal of the European Union on 16 December 2022 and entered into force on 5 January 2023. Member States must transpose it into domestic law by 6 July 2024.

The CSRD enhances reporting requirements outlined in the Non-Financial Reporting Directive 2014/95/EU (NFRD), mandating in-scope companies to annually report on various sustainability matters in their management reports.

The CSRD marks a significant expansion of non-financial reporting obligations, with an estimated coverage of around 50,000 companies, up from approximately 11,700 companies currently reporting under the NFRD.

Which companies are in scope and when?

CRITERIA WHEN IS REPORTING REQUIRED
1. Large EU incorporated undertakings and parent undertakings of a large group
The undertaking must:
  • be a public interest entity (PIE)1;
  • exceed at least one of the following two criteria:
    • balance sheet total of €20 million;
    • net turnover of €40 million;
  • have on average 500 employees during the financial year.
Financial periods beginning on or after 1 January 2024, which means the first reports will be produced by Category 1 undertakings in 2025.
2. Large EU incorporated undertakings and parent undertakings of a large group (that are not caught in Category 1)
The undertaking must exceed at least two of the following three criteria:
  • balance sheet total of €20 million;
  • net turnover of €40 million;
  • has on average 250 employees during the financial year.
Financial periods beginning on or after 1 January 2025, which means the first reports will be produced by Category 2 undertakings in 2026.
3. EU incorporated small and medium-sized undertakings (SME) listed on EU regulated markets
The undertaking must:
  • be a PIE;
  • not be micro undertakings2;
  • not exceed the limits of at least two of the following three criteria:
    • a balance sheet total of €20 million;
    • a net turnover of €40 million;
    • has on average 250 employees during the financial year.
Financial periods beginning on or after 1 January 2026, which means the first reports will be produced by Category 3 undertakings in 2027. However, SMEs can opt-out until 2028.
4. Undertakings not incorporated in the EU with a subsidiary or branch in the EU
The undertaking must:
  • have a net turnover of more than €150 million in the EU for each of the last two consecutive financial years; and
  • have an EU incorporated subsidiary undertaking that is a large undertaking (meeting Category 2 criteria) or a PIE SME (meeting Category 3 criteria); or
  • have a branch in an EU Member State with a net turnover of more than €40m.
Financial periods beginning on or after 1 January 2028, which means the first report will be produced by Category 4 undertakings in 2029.