🌍 CSRD: A DIRECTIVE NOW TRANSPOSED INTO BELGIAN LAW: WHAT IS THE CSRD AND TO WHOM DOES IT APPLY ?

As mentioned in my previous Linkedin post, the European Corporate Sustainability Reporting Directive (CSRD) was recently transposed into Belgian law.

Here are the main stages:

• Enactment of the law: 2 December 2024
• Publication in the Belgian National Gazette: 20 December 2024
• Entry into force: 30 December 2024

💡 But what exactly is the CSRD?

At the end of 2022, Europe adopted new rules on sustainable finance, imposing greater transparency obligations on companies. These measures are designed to address today’s major economic and environmental challenges, and have three main goals:

1. Redirecting financial flows towards sustainable investments to encourage inclusive and environmentally-friendly growth.
2. Managing the financial risks associated with climate change, resource depletion, environmental degradation and social issues.
3. Improve transparency and promote a long-term vision in economic and financial activities.

Through this directive, Europe aims to enable :

• Investors and stakeholders to assess the risks associated with sustainable development (climate, social, environmental); and
• To create a culture of transparency about the impact of companies’ activities on people and the environment.

🎯 Which companies are concerned ?

Companies concerned:

1. Size criteria :

This applies to companies which, for two consecutive financial years, exceed at least two of the following criteria at the balance sheet date:

• Balance sheet total: €25,000,000 ;
• Annual net turnover: €50,000,000 (as defined by Article 1:26/1 of the Belgian Code on Companies and Associations Code (“BCCA”));
• Average number of employees: 250 full-time equivalents.

• Listed companies :

All companies whose shares or financial securities are listed on a stock exchange or traded on a regulated market (i.e. an officially recognised market subject to strict rules) are concerned by these obligations. This also includes certain companies whose securities are accessible on specific markets, as defined by the Belgian laws on supervision of the financial sector and financial markets (see exception below in the point concerning small listed companies).

• Public interest entities governed by Belgian law which, for at least two consecutive financial years as of the balance sheet date, exceed two of the size criteria mentioned in point 1 above:

• The credit institutions referred to in article 1:12, 3° of the BCCA ;
• The insurance and reinsurance undertakings referred to in article 1:12, 4° of the BCCA.

Special points:

• Exceeding the criteria :

The impact of exceeding or not exceeding the thresholds mentioned is only taken into account if this occurs during two consecutive financial years. In this case, the consequences apply from the following financial year.

• New companies :

For newly established companies, a good faith estimate is made at the start of the financial year. If this estimate indicates that more than of a criterion will be exceeded, the obligations apply from the first financial year.

• Exceptional duration of the financial year :

If the financial year lasts less than 12 months or more than 12 months (but not more than 24 months), annual net turnover are adjusted in proportion to the number of months. It should be noted that each month started is counted as a whole month.

• Calculation of employees in full-time equivalents (FTE) :

The volume of work is calculated by taking into account the hours of part-time employees. For example, an employee working 30.4 hours a week for a normal working week of 38 hours counts as 0.8 FTE.

Companies not concerned :

Obligations do not apply:

• GP, LP, EEIG:

General partnership, simple limited partnerships and European Economic Interest Groupings (“EEIG“), where all partners with unlimited liability are natural persons.

• Small listed companies :

Companies listed on a regulated market that do not exceed more than one of the following criteria at the date of their last balance sheet:

• Average number of employees: 10 FTE ;
• Annual net sales: €900,000 (article 1:26/1 of the BCCA) ;
• Balance sheet total: €450,000.

• Specific financial income :

Financial products (i.e. collective portfolio management and individual pension products) mentioned in Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability reporting in the financial services industry.

• National Bank of Belgium (NBB) :

The NBB is exempt, except for the obligation set out in article 3:6/2 of the BCCA. This article requires its administrative body to detail in its management report :

• The size of its essential intangible resources (e.g. intangible assets such as licences, patents or business models);
• Their role in creating value for the company.

Obligations that could be extended in the future:

📈 The CSRD  : obligations that could be extended in the future

As indicated above, only certain categories of companies are currently affected by the obligations imposed by the CSRD  which was recently transposed into Belgian law by the Act of 2 December 2024.

However, as is often the case with European standards, these rules could eventually be extended to a wider range of businesses. This dynamic of ‘percolation’ – where requirements initially limited to a specific category end up applying to the entire economic fabric – has already been observed in other European regulatory areas, such as data protection with the GDPR or energy sustainability obligations.

Why is this extension likely? Because the issues addressed by the CSRD, such as the transparency of companies’ environmental and social impacts, are of global concern. It is becoming increasingly clear that all companies, whatever their size, play a role in the transition to a sustainable economic model. It is therefore only logical that these principles of transparency and responsibility should, sooner or later, become widespread.

For companies not yet affected, it is essential to anticipate these changes. Integrating sustainable practices now, structuring non-financial data or training in the principles of ESG reporting (i.e. reporting based on environmental, social and governance criteria) can offer a competitive advantage and enable a smoother transition if these obligations are extended.

In short, while the CSRD rules do not yet apply to all companies, they clearly outline an underlying trend: that of increased and shared responsibility for sustainable economic development. Adaptation, anticipated today, could well become essential tomorrow.

Sources :

• Law of 2 December 2024 on the publication of sustainability information by certain companies and groups, on the assurance of sustainability information and on miscellaneous provisions, M.B. 20 December 2024
• Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) 537/2014 and Directives 2004/109/EC, 2006/43/EC and 2013/34/EU as regards publication of sustainability information by companies.

📩 Do you have any questions? Don’t hesitate to contact us directly here! 😊

Evelyne Liégeois