Legislation will integrate new corporate sustainability reporting rules with the accounting and audit framework in Ireland.
Ireland’s Government has signed into law new rules that will require large and listed businesses to integrate corporate sustainability reporting into their accounting and audit processes.
The European Union (Corporate Sustainability Reporting) Regulations 2024 were signed into law by Minister for Enterprise Peter Burke, TD, and come into effect on 6 July.
“These regulations provide a helpful structure to companies for preparing sustainability reporting in a clear and consistent way”
The Regulations require that all large companies and all listed companies (except listed micro-enterprises) report sustainability information in accordance with European Sustainability Reporting Standards in the directors’ report. Sustainability reporting must be provided with an auditor’s opinion with limited assurance and reported digitally.
Green corporate reporting rules
“The signing of these important Regulations today marks a significant step the Government is taking in the context of the European Green Deal and the EU’s Action Plan for Financing Sustainable Growth,” Minister Burke said.
“These regulations provide a helpful structure to companies for preparing sustainability reporting in a clear and consistent way, that gives the relevant information to investors, consumers, and other stakeholders, whilst minimising unnecessary burdens on companies.
“I am happy to announce that the European Union (Corporate Sustainability Reporting) Regulations 2024 are being implemented on time in Ireland, in compliance with the EU transposition deadline, and I know this will bring the necessary certainty to both the preparers and the users of sustainability reporting.”
What are the new Corporate Sustainability Reporting rules?
The European Parliament and Council adopted Directive 2022/2464/EU as regards Corporate Sustainability Reporting on 5 January 2023.
The Directive is the EU’s response to the global reframing of company reporting to include environmental, social and governance matters which arises from the European Green Deal and the EU Action Plan for Financing Sustainable Growth.
It harmonises the EU rules for sustainability reporting by companies and to put this on the same footing as financial reporting, ensuring that investors and other stakeholders have access to information to assess investment risks arising from climate change and other sustainability issues.
The directive expands the scope of the existing EU rules for non-financial reporting by large public interest entities to include large companies, and listed SMEs (excluding micros) on a main EU stock market.
Subsidiaries and large branches of non-EU companies with a significant presence in the EU will also be required to produce an equivalent sustainability report at the level of the parent.
The new rules will be phase for financial years from 2024 – 2028.
Companies in scope will be required to report annually in their directors’ report on environmental, social and governance (ESG) and human rights matters according to EU mandatory standards entitled European Sustainability Reporting Standards (ESRS).
The directors’ report must be produced in single electronic format by digitally tagging the information making it more amenable to digital analysis.
The information reported will be subject to a limited assurance (audit) until the adoption of reasonable sustainability assurance standards by the Commission if feasible by 2028.
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