ESG | The Italian Council of Ministers approves Legislative Decree 125/2024 implementing the EU Corporate Sustainability Reporting Directive (“CSRD”)

On 10 September 2024, Legislative Decree No. 125 of 6 September 2024 (the Decree) was published in the Official Gazette of the Italian Republic (Gazzetta Ufficiale), so transposing to the Italian legal system the EU Corporate Sustainability Reporting Directive, the objective of which is to improve transparency towards stakeholders by promoting sustainable business practices.

This goal is intended to be pursued by requiring companies to provide qualitative and quantitative information necessary for understanding the impact of the company’s activities on sustainability issues and how these issues affect the company’s performance and results.

Under the Decree, companies will disclose information on risks and opportunities related to ESG practices in their annual financial statements. The sustainability reporting will be certified either by the company’s auditor or an external auditor.

As of 2024, the Decree will apply to listed companies that exceed at least two of the following limits: (i) total balance sheet assets exceeding 25 million euros; (ii) net revenues exceeding 50 million euros; (iii) more than 500 employees.

Sustainability reporting obligations will also extend progressively to medium-sized companies by 1 January 2025 and to SMEs by 1 January 2026.

Newsletter n. 99 – August/September 2024