Proposal for Danish implementation of CSRD out for consultation
Published 17 October 2023
Category: Impact and ESG
On 13 October 2023, the legislative proposal for implementation of the Corporate Sustainability Reporting Directive (“CSRD”) and a number of appertaining executive orders went out for consultation.
The purpose of the legislative proposal is to implement CSRD (the “CSRD Proposal”) in Danish legislation and introducing increased thresholds from the Directive on the Annual Financial Statements, Consolidated Financial Statements and Related Reports of Certain Types of Undertakings (to reflect the latest inflation, especially in 2021 and 2022). The proposal will make changes to the Danish Financial Statements Act, the Danish Act on Approved Auditors and Audit Firms, along with Danish corporate and financial legislation.
The CSRD Proposal will at first be directly relevant for large companies within reporting class D with more than 500 employees, taking effect from 1 January 2024 (e.g. companies already reporting under Section 99A of the Danish Financial Statements Acts). From 1 January 2025, it is expected that large companies in reporting class C and reporting class D with 500 employees or less will be subject to the CSRD Proposal. Finally, small and mid-sized companies reporting under reporting class D will be covered from 1 January 2026. The CSRD Proposal also contain regulation of group consolidated reporting.
It is worth noting that one thing is the companies directly covered by the CSRD Proposal. But the indirect impact of the reporting requirements entails that a huge number of companies, large, medium and small alike, will (if they have not already done so) need to address the sustainability data and reporting requirements and become familiar with the ESG concept. The legal framework for ESG is only increasing – and this in a rapid pace. Consequently, it will influence the supply chain of all business covered by regulation such as the CSRD Proposal.
The CSRD Proposal consultation is available here (in Danish).
Appertaining the CSRD Proposal are no less than 18 executive orders (the “Executive Orders”) consisting of 9 new executive orders without mark-up and corresponding versions with mark-up, mainly focusing on approved auditors and audit firms. The Executive Orders are available here (in Danish).
Furthermore, two executive orders on (i) financial reporting for credit institutions and stockbrokers etc. and (ii) financial reporting for insurance companies and multi-employer pension funds have been put forth for consultation and are available here (also in Danish). These are linked to the CSRD Proposal.
The consultation periods lapse 24 November 2023. The CSRD Proposal is expected to be presented February 2024 and enter into force 1 July 2024.
The implementation of the CSRD Proposal and the appertaining executive orders introduces a wide range of requirements on sustainability reporting and are part of the many and extensive ESG rules and requirements coming from the EU these days (see also our update on the CSDD Directive here).
We continue to review and monitor the existing and coming ESG regulation closely.
Tags: Sustainability
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