Sustainability Reporting Regulations amended, but more required

We've written previously about Ireland’s European Union (Corporate Sustainability Reporting) Regulations 2024 (the Regulations), which transpose the Corporate Sustainability Reporting Directive (CSRD) into national law. In our article, we highlighted certain anomalies between the Regulations and CSRD, which we hope to see addressed by the Department of Enterprise, Trade and Employment (DETE).

On 4 October 2024, the DETE published the European Union (Corporate Sustainability Reporting) (No. 2) Regulations 2024 (the amending SI), which took effect on 1 October. The amending SI rectifies a few of these anomalies as follows:

• It confirms that the transitional period permitting consolidated reporting by certain EU subsidiaries that share a  common, third-country ultimate parent ('artificial consolidation') begins as soon as the relevant subsidiary is required to report under the Regulations. There was some concern that the wording of the Regulations initially delayed the operation of this transitional measure until 1 January 2028.
   
• It corrects the inadvertent exclusion of large public-interest companies from availing of consolidated reporting for certain subsidiaries and holding companies. Now, as CSRD intended, only large companies listed on an EU regulated market cannot avail of consolidated sustainability reporting.

While the amending SI is a positive development, our primary concern with the Regulations (relating to the breadth of companies brought within scope in Ireland) has not been addressed on this occasion. If the provisions deeming certain Irish companies to be large regardless of size and/or listing status remain unchanged, the Regulations will have a scope and reporting timeline that differs from the intended scope and timeline of CSRD. We hope that further amendments are forthcoming. The FAQ document expected from the DETE in the coming weeks will also hopefully further elucidate the application of the Regulations.