SCOPE AND APPLICATION DATES

1) Which financial year determines when an undertaking falls into a certain size-category of undertakings: the financial year of the reporting year or the financial year prior to the reporting year? The rules to determine the size of an undertaking for sustainability reporting purposes rely on the existing rules for financial reporting purposes applying to the undertaking on the basis of the Member State in which it has its registered office (76). These rules are set out in the national measures transposing the preexisting Accounting Directive. 2) If an undertaking evolves during the course of a given financial year such that it meets the criteria for inclusion in a different category of undertaking, is it required to start reporting sustainability information according to the rules that apply to that new category for that same financial year or only after the criteria have been met for two consecutive financial years? The rules to determine the size category of an undertaking for sustainability reporting purposes, when that undertaking is evolving during the course of a given financial year, rely on the existing rules for financial reporting purposes (see also FAQ 1). These rules are set out in the national measures transposing the preexisting Accounting Directive. 3) How is the average number of employees calculated for the purpose of the undertaking’s categorisation under the Accounting Directive? Union legislation does not regulate the calculation of the average number of employees for the purpose of the undertaking’s categorisation under the Accounting Directive. However, Member States may have adopted national rules or provided guidance on this matter. In the absence of national rules or guidance, undertakings may use Article 5 of Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (77) as guidance regarding the measurement of staff headcount, as a proxy of an average number of employees: ‘[…] The headcount corresponds to the number of annual work units (AWU), i.e. the number of persons who worked full-time within the enterprise in question or on its behalf during the entire reference year under consideration. The work of persons who have not worked the full year, the work of those who have worked part-time, regardless of duration, and the work of seasonal workers are counted as fractions of AWU. The staff consists of: (a) employees; (b) persons working for the enterprise being subordinated to it and deemed to be employees under national law; (c) owner-managers; (d) partners engaging in a regular activity in the enterprise and benefiting from financial advantages from the enterprise. Apprentices or students engaged in vocational training with an apprenticeship or vocational training contract are not included as staff. The duration of maternity or parental leaves is not counted.’ 4) Are SMEs without transferable securities admitted to trading on an EU regulated market required to report sustainability information under Articles 19a/29a of the Accounting Directive? SMEs without transferable securities admitted to trading on an EU regulated market are not required to report sustainability information at individual level under Article 19a of the Accounting Directive (individual sustainability statement). They are however required to report sustainability information at consolidated level under Article 29a of the Accounting Directive (consolidated sustainability statement) if they are parent undertakings of a large group (78). Article 29a of the Accounting Directive applies regardless of the size of the parent undertaking. 5) Are credit institutions and insurance undertakings required to report sustainability information under Articles 19a and 29a of the Accounting Directive regardless of their legal form? Yes. Pursuant to Article 1(3) of the Accounting Directive, credit institutions (79) and insurance undertakings (80), including cooperatives and mutual undertakings, are included in the scope of Article 19a of the Accounting Directive (individual sustainability statement) regardless of their legal form if they are large undertakings or SMEs (excluding micro-undertakings) with transferable securities admitted to trading on an EU regulated market. They are also included in the scope of Article 29a of the Accounting Directive (consolidated sustainability statement) regardless of their legal form where they are the parent undertaking of a large group. Pursuant to Article 1(3) point (b) second sentence of the Accounting Directive, Member States may choose not to apply, wholly or in part, the sustainability reporting requirements to specific credit institutions (81). 6) Are financial institutions – other than insurance undertakings and credit institutions – required to report sustainability information under Articles 19a/29a of the Accounting Directive? Yes. Financial institutions – other than insurance undertakings and credit institutions – are included in the scope of Articles 19a and 29a of the Accounting Directive where they meet both of the following requirements: — They are undertakings incorporated as a type of undertaking listed in Annex I or II of the Accounting Directive (82); — they are either large undertakings or SMEs (excluding micro-undertakings) with transferable securities admitted to trading on an EU regulated market (Article 19a of the Accounting Directive) and/or parent undertakings of a large group (Article 29a of the Accounting Directive). 7) If a Small and Non-Complex Institution (SNCI) is currently required to report non-financial information under Directive 2014/95/EU (NFRD), does it have to continue reporting non-financial information in accordance with the provisions of NFRD until the CSRD regime starts applying to small and non-complex institutions (i.e. from financial years starting on or after 1 January 2026)? Yes. Based on Article 5(2) of the CSRD, a small and non-complex institution that is a large undertaking or an SME (excluding micro-undertakings) with transferable securities admitted to trading on an EU regulated market will be required to report sustainability information in accordance with ESRS (or, alternatively, with LSME ESRS) starting from financial year 2026. Therefore, a small and non-complex institution that is currently required to report non-financial information under Article 19a of the Accounting Directive as introduced by Directive 2014/95/EU (NFRD) (83) (i.e. because, besides being a credit institution, it is also a large undertaking exceeding on its balance sheet dates the criterion of an average number of 500 employees during the financial year) would have to continue reporting under the NFRD regime until the CSRD regime becomes applicable to small and non-complex institutions (i.e. from financial year 2026). 8) If a Small and Non-Complex Institution (SNCI) is a parent company of a large group, can that SNCI benefit from the derogation under Article 19a(6) of the Accounting Directive and prepare sustainability reporting in accordance with LSME ESRS? If an undertaking (regardless of the size or the specific type, e.g. including SNCIs) is a parent undertaking of a large group, it must publish a consolidated sustainability statement under Article 29a of the Accounting Directive prepared in accordance with ESRS. The possibility to use LSME ESRS in accordance with Article 19a(6) of the Accounting Directive only applies to SMEs (excluding micro-undertakings) with securities listed on an EU regulated market and to small and non-complex institutions, captive insurance undertakings or captive reinsurance undertakings (provided they are either large undertakings or SMEs – excluding micro-undertakings – with securities listed on an EU regulated market for the preparation of their individual sustainability statement. See also FAQ 10). 9) If a Small and Non-Complex Institution (SNCI) is a parent company of a large group, when does it have to start reporting sustainability information? If an SNCI is a parent undertaking of a large group, it must publish a consolidated sustainability reporting using ESRS either from financial year 2024 (if the SNCI is a Public Interest Entity exceeding on its balance sheet date, on a consolidated basis, an average number of 500 employees during the financial year) or from financial year 2025 (in all other cases). 10) If an SNCI is a parent undertaking of a large group but is not required to issue consolidated financial statements due to all its subsidiaries being immaterial, is this SNCI still required to prepare and publish a consolidated sustainability statement? No. Article 29a of the Accounting Directive applies to parent undertakings of large groups. However, if a parent undertaking of a large group is exempted from preparing and publishing consolidated financial statements based on Article 23(10) of the Accounting Directive (i.e. because it only has subsidiary undertakings which are immaterial, both individually and collectively, or because all its subsidiary undertakings can be excluded from consolidation by virtue of Article 23(9) of the Accounting Directive), that parent undertaking is not required to prepare and publish a consolidated sustainability statement. However, to the extent that such parent undertaking is itself a large undertaking as defined in Article 3(4) of the Accounting Directive and would therefore fall within the scope of Article 19a of the Accounting Directive, that undertaking must prepare and publish an individual sustainability statement in accordance with Article 19a of the Accounting Directive. This individual sustainability statement must consider its subsidiaries when reporting about its value chain in accordance with ESRS. 11) Are Undertakings for Collective Investments in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs) required to report sustainability information under Articles 19a and 29a of the Accounting Directive? No. Based on Article 1(4) of the Accounting Directive, UCITS and AIFs are exempted from reporting sustainability information under the Accounting Directive even if these financial products are in the scope of the Accounting Directive (84). 12) Are undertakings that manage Collective Investments in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs) required to report sustainability information under Articles 19a and 29a of the Accounting Directive? Article 1(4) of the Accounting Directive aims to exclude UCITS and AIFs from the sustainability reporting requirements under Articles 19a and 29a of the Accounting Directive. However, undertakings that manage UCITS and AIFs would fall under the scope of the sustainability reporting obligations under Articles 19a and 29a of the Accounting Directive if they fulfil the legal form conditions under Article 1(1) of the Accounting Directive, and if they meet the company size criteria under Articles 19a and 29a of the Accounting Directive. 13) Are Exchange-Traded Funds (ETFs) and Real Estate Investment Trusts (REITs) required to report sustainability information under Articles 19a and 29a of the Accounting Directive? As regards ETFs, since these financial products are established as Collective Investments in Transferable Securities (UCITS) or Alternative Investment Funds (AIFs), the same exemption applicable to UCITS and AIFs applies (see FAQ 11). As regards listed REITs, to the extent that they meet the conditions of Article 4(1)(a) of Directive 2011/61/EU (85) to qualify as AIFs, the same exemption applicable to AIFs applies (see FAQ 11). 14) Are pension funds required to report sustainability information under Articles 19a and 29a of the Accounting Directive? If a pension fund is incorporated as a type of undertaking listed in Annex I or II of the Accounting Directive (86) and falls under the scope of Articles 19a and 29a of the Accounting Directive, it will have to include in its management report a sustainability statement. Unlike Collective Investments in Transferable Securities (UCITS) or Alternative Investment Funds (AIFs), pension funds are not covered by the exclusion from the sustainability reporting requirements set out in Article 1(4) of the Accounting Directive. 15) Is the sustainability statement published within the management report by an issuer of transferable securities admitted to trading on an EU regulated market to be considered as ‘regulated information’ as per Article 2(1) point (k) of the Transparency Directive? Yes. Article 2(1) point (k) of the Transparency Directive defines regulated information as, inter alia, ‘ all information which the issuer, or any other person who has applied for the admission of securities to trading on a regulated market without the issuer’s consent, is required to disclose under this Directive [i.e. the Transparency Directive] […]’. Article 4(5) of the Transparency Directive requires issuers to disclose a sustainability statement, which is therefore to be considered as ‘regulated information’. 16) Which companies may opt out of the obligation to report sustainability information for financial years starting before 1 January 2028 pursuant to Article 19a(7) of the Accounting Directive? Based on Article 19a(7) of the Accounting Directive, SMEs (excluding micro-undertakings) with transferable securities admitted to trading on an EU regulated market may decide not to report sustainability information under Article 19a of the Accounting Directive for financial years starting before 1 January 2028 (e.g. for financial years 2026 and 2027). In such cases, the SME shall, nevertheless, briefly state in its management report why the sustainability reporting was not provided. This opt-out also applies to small and non-complex institutions, as well as to captive insurance and reinsurance undertakings, provided they are SMEs (excluding micro-undertakings) with transferable securities admitted to trading on an EU regulated market.

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Source: EUR-Lex (Cellar) · retrieved 2026-09-07