The Council of the EU has adopted the proposed European Union Corporate Sustainability Reporting Directive (CSRD) which will require certain captive insurers and other large companies to disclose information on the way they operate and manage social and environmental challenges.
The EU law, adapted from the Non-Financial Reporting Directive (NFRD), has been adopted to help investors, civil society organisations, consumers, policy makers and other stakeholders evaluate the non-financial performance of large companies. It also encourages these companies to develop a responsible approach to business.
EU rules on non-financial reporting currently apply to large public-interest companies with more than 500 employees. This covers approximately 11,700 large companies and groups across the EU, including insurance companies with more than 500 employees.
According to Macfarlane’s law firm, the CSRD will go-live in 2024 for companies already compliant to the NFRD. From 2025, it will apply to large companies that are not currently subject to the NFRD. From 2026, it will apply to captive insurance undertakings.
The CRSD does not apply in the UK but will affect UK companies with securities listed on an EU-regulated market, Macfarlanes adds. From 2028, it will also affect UK companies that generate net turnover in the EU above €150 million and those that have a large subsidiary or branch, or a listed subsidiary, in the EU.
