Green light for the EU's new sustainability reporting directive (CSRD)
The EU is on the march within the area of sustainability. The European Green Deal is a package of political initiatives with the aim of contributing to a green transition in the EU and with the ultimate goal that Europe will be the world's first climate-neutral region no later than 2050.
The latest on the legislation front is that the Council finally adopted the new directive on sustainability reporting (”CSRD”) at the end of November. CSRD entails a revision and strengthening of the existing rules for sustainability reporting, with the aim of promoting increased transparency and comparability between companies, as well as contributing to the acceleration of the green transition.
To be in line with the Green Deal's various legislatory initiatives, CSRD is significantly increasing the requirements for the content in the sustainability reports. For example, environmental sustainability will be classified according to the EU's green taxonomy, which means among other things that to be classified as environmentally sustainable, the reporting companies (i) must contribute significantly to one or a number of the taxonomy's six set environmental objectives, (ii) must not cause damage to any of the other objectives , and (iii) must meet certain minimum requirements from the OECD and the UN within sustainability.
CSDD is another proposed directive linked to CSRD that the European Commission presented in February this year and which included increased requirements for companies' due diligence processes in sustainability issues. Information about these due diligence processes must also be included in the companies' sustainability report. The Council adopted its general guideline on 1 December 2022 and is now ready to start negotiations with the Parliament regarding CSDD.
What happens now?
CSRD will soon be entering into force. The member states will subsequently have 18 months to implement the directive, which will take place through new national legislation to be produced based on CSRD. The 2024 financial year will be the first year that sustainability reports have to be presented according to CSRD's standard, and will encompass large companies of public interest that have had an average of at least 500 employees during the financial year. For other companies that currently come under the Annual Accounts Act's requirement to draw up sustainability reports, 2025 is the first financial year that the report must be presented according to CSRD, with the 2026 financial year applying for other listed companies and certain credit institutions and insurance companies.
Lindahl is monitoring the development of the legislation within the area of sustainability. If you any have questions or concerns surrounding the new proposal or other queries relating to requirements for sustainable business, you are most welcome to contact us.

Do you want to know more? Contact:
Johanna Lindqvist
Counsel | AdvokatPhilip Ahl
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