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Key dates:

Effective since 2023.

Applies to:

• From financial year 2024, companies with more than 500 employees that were previously required to report under the NFRD are affected. First report to be published in 2025.

• From financial year 2025, companies with more than 250 employees and/or a balance sheet of over €20m and/or a net turnover of over €40m are affected. First report to be published in 2026.

• From financial year 2026, EU-based, listed SMEs will be affected. However, they can choose to opt-out until reporting year 2028.

• From financial year 2028, non-EU companies, with a net turnover of over €150m in the EU and with at least one EU subsidiary or branch office with a turnover of over €40m are affected.

What it says:

Large EU companies and listed companies operating in the EU must publish annual reports in which they report on how sustainability matters impact their business and how their operations are impacting people and the environment.

Companies must carry out a “double materiality” assessment to identify material topics, must follow the European Sustainability Reporting Standards (ESRS) and implement third-party assurance of their reporting.


Penalties will differ based on individual member state transpositions. France has been the first to transpose the Directive into law as of this publication, introducing fines of up to €75,000 and the potential of five years imprisonment for directive infringements.

Key Requirements:

GHG Emissions Tracking Supply Chain Mapping Third Party Assurance Adverse Media Reporting Xinjiang/WRO Mapping External Reporting Supplier/Risk Monitoring Supplier Engagement Remediation Plan Product Mapping ESG Risk Analysis Supplier Assessments Supplier Training Supplier Corrective Action Plan