The draft law implementing the CSRD is getting closer
The Council of Ministers has published the assumptions of the draft law on amendments to the Accounting Act and certain other laws. Importantly from the ESG point of view, the new provisions are intended, amongst others, to implement the European Parliament and Council Directive (EU) 2022/2464 of December 14, 2022, i.e. the CSRD, into the Polish legal order.
The CSRD is the next step in the development of non-financial information reporting, also known as corporate sustainability reporting. Its key objective is to ensure that a larger group of companies report relevant, comparable and reliable sustainability information – more useful to investors and stakeholders.
The CSRD introduces significant changes to corporate ESG reporting, which will be subject to implementation into national law. Based on it, amongst others:
- the scope of entities required to report has been expanded, with the obligation extended to include, inter alia, (i) all large entities, (ii) entities that are the parent company of a large group, (iii) small and medium-sized entities admitted to trading on a regulated market (excluding micro-enterprises), and (iv) subsidiaries and branches based in an EU member state that meet certain conditions and size criteria;
- the type of reporting standard has been standardized – arbitrariness in the choice of reporting standards has been abandoned in favor of mandatory European Sustainability Reporting Standards;
- the scope of reported information has been expanded – information on sustainability issues will be more detailed than before;
- verification of sustainability reporting has been introduced – mandatory attestation of reported information by auditors is provided for.
As a side note, we signal that the proposed legislation also introduces changes resulting from Commission Delegated Directive (EU) 2023/2775 of October 17, 2023. The delegated directive raises, in principle, by 25% the financial thresholds defining the various categories of entities (micro, small, medium and large entities). Belonging to a given category of entity affects, for example, the ability to benefit from the simplifications provided for in the Accounting Directive (Directive 2013/34/EU) or the obligation to audit financial statements.
As a consequence of the adoption and implementation of the CSRD and the Delegated Directive into the Polish legal order, it will be necessary to make appropriate amendments to the Accounting Act, the Act on Statutory Auditors, Audit Firms and Public Supervision and the Act on the National Court Register.
Detailed amendments to national legislation will be presented soon. The planned deadline for the adoption of the draft law by the Council of Ministers has been set for the second quarter of 2024, while the deadline for implementing the provisions of the CSRD is July 6, 2024, and the delegated directive is December 24, 2024.