On 25 September 2024, Legislative Decree No. 125 of 6 September 2024 came into force, as published in Official Gazette No. 212 of 10 September 2024. This decree implements Directive 2022/2464/EU on the Corporate Sustainability Reporting Directive (CSRD). It marks a significant step forward in increasing transparency obligations for businesses, expanding sustainability reporting requirements to new categories of companies beyond large enterprises already subject to such obligations.
1. OBJECTIVES OF THE CSRD DIRECTIVE ↑
The main aim of the Directive is to enhance the quality of sustainability-related information, emphasising environmental, social, and governance (ESG) impacts. The goal is to make the information accessible and comparable across the EU, ensuring greater transparency for investors and stakeholders. The new reporting framework will replace the previous non-financial reporting regime, aligning companies with the European Sustainability Reporting Standards (ESRS) developed by EFRAG.
2. EXPANSION OF REPORTING OBLIGATIONS ↑
A key innovation of Legislative Decree No. 125/2024 is the broadening of the scope of companies required to report.
In addition to large companies and large corporate groups, SMEs listed on regulated markets will also be subject to these obligations, excluding micro-enterprises. Moreover, subsidiaries of non-EU companies with significant commercial activities in the EU, and companies exceeding specific thresholds in turnover and employee numbers, must comply with these new provisions.
Content Requirements for Sustainability Reporting
The sustainability report must cover a wide range of information, including:
- Corporate strategies linked to climate transition;
- Environmental impacts of business operations;
- Role of governing bodies in sustainability issues;
- Risk definition, assessment, and opportunities related to ESG factors.
The focus is also on companies’ value chains, including suppliers and commercial relations.
Gradual Implementation Timeline
The Decree establishes a phased timeline for implementing the reporting obligations:
- From 2025, large enterprises with more than 500 employees will be in scope.
- By 2026, the obligation will be extended to other large enterprises and groups meeting specific criteria.
- From 2027, listed SMEs will be in scope.
- By 2029, subsidiaries of companies based in third countries will also be in scope.
3. ASSURANCE AND OVERSIGHT OF REPORTING ↑
The Decree introduces a requirement for sustainability reports to undergo external assurance by a statutory auditor.
This measure ensures compliance with ESRS standards and the provision of accurate, verifiable information. Audits must be conducted by professionals authorised to issue the new certification.
4. ACCOUNTANTS SUPPORTING BUSINESS ↑
Caravati Pagani has established a specialised multidisciplinary team to assist businesses in meeting these new and challenging requirements.
Our team of professionals will be able to certify these sustainability reports, as authorised to perform statutory audits of financial statements.
