On 26 September 2024, the European Commission published infringement decisions to ensure complete and timely transposition of EU directives.
One of those infringement notices concerns 17 Member States who have failed to notify full transposition of the CSRD into national law (including required amendments to the national measures transposing the Accounting Directive, the Transparency Directive and the Audit Directive) by 6 July 2024. It has sent letters of formal notice to Belgium, Czechia, Germany, Estonia, Greece, Spain, Cyprus, Latvia, Luxembourg, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia and Finland giving them two months to respond and complete their transposition. If the Member States fail to respond satisfactorily then the Commission may issue a reasoned opinion.
This follows the formal letter sent to Sweden in July 2024 asking Sweden to amend its transposition measures to require companies to start reporting from 1 January 2024 rather than 1 July 2024, as they have included in their transposition.
The Commission notes that in the absence of full transposition of the CSRD by all Member States, “it will not be possible to achieve the necessary level of harmonisation of sustainability reporting in the EU and investors will not be in a position to take into account the sustainability performance of companies when making investment decisions”.
Next steps
We wait to see how the Member States proceed to transposition of the CSRD and whether the Commission will be forced to take further action.
Our global Sustainable Finance & Investment group brings together a multidisciplinary global team that provides clients with best-in-market support. We are following the transposition of CSRD very closely so please get in touch if you would like to discuss.
This note is intended to be a general guide and covers questions of law and practice. It does not constitute legal advice.
Authored by Emily Julier
Hogan Lovells (Luxembourg) LLP is registered with the Luxembourg bar
