These regulations transposed the Corporate Sustainability Reporting Directive (EU) 2022/2464 (CSRD) into Irish law.

Environmental, Social and Governance (ESG) reporting requirements will gradually be introduced for all large companies and listed companies in Ireland.

The European Union (Corporate Sustainability Reporting) Regulations 2024 transposed the Corporate Sustainability Reporting Directive (EU) 2022/2464 (CSRD) into Irish law on 6 July 2024.

This legislation applies in the Republic of Ireland only.

What has changed?

Scope

Environmental, Social and Governance (ESG) reporting requirements apply to all large companies and listed companies in Ireland. Reporting duties will apply as described under ‘introduction of reporting duties’ below.

Subsidiaries and large branches of non-EU companies with a significant EU presence are required to produce an equivalent sustainability report at the parent level.

Listed micro-enterprises (those with fewer than 10 employees and either an annual turnover and/or annual balance sheet not exceeding €2 million) are exempt from reporting duties.

Introduction of ESG Reporting Duties

Reporting duties will be introduced from the financial year that begins on or after the dates below:

• public interest entities (greater than 500 employees): 1 January 2024;
• larger companies (greater than 250 employees): 1 January 2025;
• Listed small and medium-sized enterprises (SMEs): 1 January 2026, although an opt out is possible until 2028.
• Large subsidiaries and branches of non-EU companies with a net turnover of €150 million in the EU: 1 January 2028.

Repoting Requirements

ESG reports must address applicable mandatory European Sustainability Reporting Standards. Companies will need to determine topics to report using the double materiality concept: information that is material from either a financial perspective or an impact perspective. Companies will also need to include information from their value chain.

Reports made must be audited by a competent party, providing assurance on the information included. Report data must be digitally readable.

Report Contents

Reports must include information necessary to understand:

• the company’s impacts on sustainability matters (environmental, social and human rights, and governance factors, including defined sustainability factors); and
• how sustainability matters affect the company’s development, performance and position.

The information above must include:

• a brief description of the company’s business model and strategy, including:
  • resilience regarding risks related to sustainability matters;
  • opportunities related to sustainability matters;
  • plans to ensure compatibility with the transition to a sustainable economy and the limiting of global warming to 1.5°C in line with the Paris Agreement and, where relevant, the exposure of the applicable company to coal-related, oil-related and gas-related activities;
  • accounting for the interests of stakeholders and impacts on sustainability matters; and
  • implementation with regard to sustainability matters.
• time-bound targets related to sustainability matters, including, where appropriate, absolute greenhouse gas emission reduction targets at least for 2030 and 2050, a description of the progress made towards those targets, and a statement of whether the applicable company’s targets related to environmental factors are based on conclusive scientific evidence.
• the role of company administrative, management and supervisory bodies regarding sustainability matters, and of their expertise and skills in relation to this role or access to such expertise and skills.
• a description of policies in relation to sustainability matters.
• details of any incentive schemes linked to sustainability matters offered to members of the administrative, management and supervisory bodies.
• a description of:
  • The due diligence process regarding sustainability matters, including where applicable compliance with EU law on due diligence processes;
  • principal actual or potential adverse impacts connected with operations and the value chain, including products and services, business relationships and its supply chain, actions taken to identify and monitor those impacts, and other adverse impacts which are required to be identified under EU law on due diligence processes; and
  • any actions taken by the applicable company to prevent, mitigate, remediate or bring an end to actual or potential adverse impacts, and the result of such actions.
• principal risks to the company related to sustainability matters, including principal dependencies on those matters, and how the company manages those risks;
• Indicators relevant to the disclosures in the bullets above.

Reporting must reflect information related to short-term, medium-term and long-term time horizons.

Reduced Reporting Requirements

Reduced reporting requirements under Section 1592 will apply to listed EU companies which are:

• SMEs;
• small and non-complex institutions as defined in the Capital Requirements Regulation (EU) No 575/2013 and captive insurance undertakings; and
• non-EU companies with securities listed on an EU regulated market which are SMEs.

These reports will need to include

• a brief description of the business model and strategy;
• a description of policies in relation to sustainability matters;
• principal actual or potential adverse impacts on sustainability matters, and any actions taken to identify, monitor, prevent, mitigate or remediate such actual or potential adverse impacts;
• principal risks to the company related to sustainability matters and how the applicable company manages those risks; and
• key indicators necessary for the disclosures in the bullets above.

These reports will be required from the financial years starting on or after 1 January 2026, although there is an option to delay reporting until the end of the 2028 financial year.

Sustainability Reporting Standards

Standards are determined at the EU level. The first set of standards are adopted under Regulation (EU) 2023/2772.

A second set of standards are due to be adopted by the European Commission by 30 June 2026 (delayed from 30 June 2024), which are to include sector-specific standards. Specific reporting standards for SMEs are also due to be adopted by June 2026.

Other Changes

The regulations amend the Companies Act 2014 to reflect the sustainability reporting requirements, make the required changes to auditing duties and to introduce standards on sustainability assurance and auditing.

Background

The CSRD amended the Non-Financial Reporting Directive 2014/95/EU and introduced further sustainability reporting requirements, which cover a broader range of companies than previously. Obligated companies are required to report on sustainability issues such as environmental rights, social rights, human rights and governance factors.

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