Status of the Corporate Sustainability Reporting Directive (CSRD) transposition into local law
Lithuania
The provisions of the CSRD were transposed into local law on 25 June 2024 and came into force on 1 July 2024 (with the transitional periods for reporting for certain types of entities remaining the same as envisaged in the CSRD). The main local laws establishing the requirements for sustainability reporting are the Law on the Accountability of Enterprises and Enterprise Groups, and the Law on the Audit and Other Assurance Services of Financial Statements. Fines for non-compliance with the requirements are provided in the Code of Administrative Misdemeanours. The whole package contains more than 10 laws or amendments. You can find some useful information related to the transposition on the website of the Ministry of Finance.
Failure to comply with the reporting requirements may lead to a fine for managers or other persons responsible to submitting the documents, ranging from EUR 600 to EUR 1,450. If there are repeated infringements, the range of fine increases to between EUR 2,000 and EUR 6,000. Failure to comply with the requirements may also result in prohibition on participating in public tenders.
Estonia
As of the beginning of September, consultations are ongoing; the draft law has not reached the parliament yet.
Latvia
As of the beginning of September, there are no updates regarding the law transposing the CSRD in Latvia. The parliament has just returned from its summer break, and the second reading is scheduled for 26 September 2024. Proposals for amendments could have been submitted until 3 September 2024, but only by a limited number of individuals, including the president of Latvia, members of the parliament or government, and the ombudsman.
EU-level news
European Commission publishes frequently asked questions on the implementation of the CSRD
The European Commission has released a new set of frequently asked questions (FAQs) to assist companies and other stakeholders, including auditors, in implementing the sustainability reporting requirements outlined in the CSRD.
The FAQs provide clear explanations of the legal requirements, aiming to make compliance easier, reduce administrative burdens, and ensure that the sustainability information reported is consistent and comparable. The FAQs also clarify some details about the European Sustainability Reporting Standards (ESRS) and other related regulations.
The FAQs can be found here.
New Ecodesign for Sustainable Products Regulation comes into force
A new EU law, the Ecodesign for Sustainable Products Regulation, come into force on 18 July 2024, establishing environmental design standards for nearly all physical goods sold in the EU. This regulation expands on the existing Ecodesign Directive, which was previously limited to energy-related products, with the goal of enhancing the circularity, energy-efficiency, and overall environmental sustainability of products on the market.
Ecodesign involves incorporating environmental considerations into every stage of product development, addressing the growing demand for sustainable and resource-efficient products. This regulation requires products to meet various sustainability criteria, such as using less energy, being longer-lasting, easily reparable, recyclable, and having a lower environmental impact throughout their lifecycle. It also introduces new rules, including a ban on destroying unsold textiles and footwear and potential future bans in other sectors, along with requirements for companies to disclose their unsold product data.
This law strengthens the EU’s commitment to sustainability, building on its history of providing benefits for businesses, consumers and the environment. For example, previous ecodesign measures have already saved EU consumers billions in energy costs and reduced energy consumption significantly. The new regulation aims to continue this positive impact while promoting transparency and sustainable public procurement practices across the EU.
More info can be found here.
Von der Leyen pledges new Clean Industrial Deal in new mandate as EU Commission President
European Commission President Ursula von der Leyen has pledged to launch a new “Clean Industrial Deal” early in her second term. This initiative aims to channel investments into infrastructure and key industries, especially those with high energy demands, to advance the EU’s goals of industrial decarbonisation, economic growth, and competitiveness.
Ahead of her re-election in July, von der Leyen emphasised that this plan will foster to support leading markets in areas like clean steel and clean technology, while also accelerating processes such as planning, tendering and permitting. She stressed the need for greater speed and simplicity, highlighting Europe’s dual focus on decarbonisation and industrialisation.
Commission presents New European Bauhaus Investment Guidelines to help investors align projects with NEB’s transformative vision
On 29 July, the European Commission adopted the New European Bauhaus (NEB) Investment Guidelines, a framework designed to guide public and private investments in aligning with NEB values of sustainability, inclusion and aesthetics. Developed in collaboration with JASPERS (Joint Assistance to Support Projects in European Regions), an advisory programme funded by the Commission and the European Investment Bank, these guidelines offer best practices and quality standards to help investors and developers transform Europe’s built environment, enhancing buildings, open spaces, and neighbourhoods while upholding social values like affordability and accessibility.
The NEB Investment Guidelines aim to steer investments towards projects that support the NEB’s goals, promoting sustainable and high-quality development across urban and rural areas. By incorporating NEB principles, these guidelines help investors focus on long-term qualitative benefits beyond simple financial returns, making investment projects more appealing and impactful. The guidelines are expected to facilitate investments in various EU regions, particularly in deprived areas, fostering inclusive growth and balanced territorial development.
Strong market demand for EIB’s new EUR 5 billion Climate Awareness Bond highlights commitment to sustainable investment
The European Investment Bank (EIB) has advanced its sustainability efforts by issuing a new EUR 5 billion Climate Awareness Euro Area Reference Note (EARN). This 10-year bond, maturing on 4 September 2034, carries an annual interest rate of 2.625% and was priced at 98.937%. The bond, which was oversubscribed by more than seven times, underscores the EIB’s significant influence in the green bond market.
Announced on August 27 and priced on August 28, the bond attracted tremendous interest, with orders from more than 280 investors, exceeding EUR 34.5 billion in total. This strong demand enabled the EIB to set the bond size at EUR 5 billion, highlighting the market’s robust appetite for sustainable investments.
European Securities and Markets Authority (ESMA) publishes final report on Guidelines on Enforcement of Sustainability Information
The guidelines outline the process and outcome of the ESMA’s consultation on the Guidelines for the Enforcement of Sustainability Information (GLESI) under the CSRD.
- Purpose: The guidelines aim to enhance the enforcement and supervision of sustainability reporting by national authorities to ensure consistent and effective compliance with the CSRD.
- Consultation process: the ESMA issued a consultation paper on 15 December 2023, seeking feedback on draft guidelines. The consultation closed on 15 March 2024, with 16 responses received.
- Outcome: The final report summarises the feedback and outlines how it influenced the final guidelines. It includes a cost-benefit analysis, opinions from relevant European agencies, and the full text of the guidelines.
- Next steps: The guidelines will be translated into all official EU languages, and national competent authorities (NCAs) will need to confirm their compliance or intent to comply within two months of publication.
European Supervisory Authorities publish Q&A on SFRD
The European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the ESMA have published a new consolidated version of the Q&A on SFDR.
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Contact the authors:
Co-head of Sorainen ESG team, Counsel, Lithuania
vitalija.impoleviciene@sorainen.com
Senior Associate, Latvia
Associate, Estonia
