This month, we bring you an overview of significant updates, including adopting crucial EU regulations and new initiatives to enhance sustainability efforts. We are also pleased to highlight important news from Estonia, Latvia and Lithuania.
Legislative news and ESG initiatives in Estonia, Latvia and Lithuania
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Status of the transposition of the Corporate Sustainability Reporting Directive (CSRD) into local law
At the end of September, the European Commission decided to open infringement procedures by sending a letter of formal notice to 17 member states calling on them to fully transpose the CSRD. The Commission called on 17 Member States to fully transpose the CSRD. Formal notices were sent to 17 member states (Belgium, Czechia, Germany, Estonia, Greece, Spain, Cyprus, Latvia, Luxembourg, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia and Finland).
In Lithuania, the CSRD had already been transposed into national law on 25 June 2024; these laws came into force on 1 July 2024.
In Latvia, the Parliament adopted the laws transposing the CSRD in its second and final reading on 26 September. The President of Latvia published the laws on 3 October and they came into force on 17 October.
The law entails amendments to 10 other laws, including the Accounting law, the Law on Annual Statements and Consolidated Annual Statements, and the Financial Instrument Market Law, among others. One of the key requirements is that sustainability reports, including group-level reports, are to be made available in Latvian, with an indication of whether or not the translation is a certified one done by an auditor.
Estonia has not yet transposed the CSRD.
EU-level news
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European Commission publishes guidance documents and proposes a one year delay for deforestation regulation
The European Commission has published additional guidance for the implementation of the EU Deforestation Regulation (EUDR). Given the feedback received from international partners about their state of preparation, the Commission also proposed to give involved parties additional time to prepare. If approved by the European Parliament and the Council, it would make the law applicable on 30 December 2025 for large companies and on 30 June 2026 for micro- and small enterprises. Since all the implementation tools are technically ready, the additional 12 months would serve as a phasing-in period to ensure proper and effective implementation.
Key areas covered by the guidance include details on the functionalities of the Information System, updates on penalties, and clarifications on critical definitions such as “forest degradation”, “operator” and “placing on the market” in the scope of the law. There is also further guidance on traceability obligations.
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European Commission restricts the use of a sub-group of PFAS chemicals to protect HUMAN health and the environment
The European Commission has adopted new restrictions under the REACH Regulation to limit the use of undecafluorohexanoic acid (PFHxA) and related PFAS substances, which are persistent in water and pose risks to human health and the environment. The ban applies to consumer products such as textiles, food packaging, waterproofing sprays, cosmetics and firefighting foams, allowing for transition periods of between 18 months and five years in order for safer alternatives to be implemented.
This measure is part of the EU’s ongoing efforts to reduce PFAS emissions and address contamination of soil and water. PFHxA is often used as a substitute for other banned PFAS, like PFOA, and this action aligns with the Chemicals Strategy for Sustainability. The restriction will take effect 20 days after its publication in The Official Journal of the European Union and complements the Commission’s broader initiative to tackle PFAS pollution under REACH.
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European Commission report shows how social investments and reforms can support competitiveness, economic growth and inclusion
The 2024 Employment and Social Developments in Europe (ESDE) report highlights how social investments and reforms contribute to corporate ESG principles by fostering sustainability, social responsibility, and good governance. Investments in areas like early childhood education, skills development, and housing have reduced social disparities and boosted employment. The focus on reducing poverty, improving housing affordability, and supporting vulnerable groups reinforces corporate commitments to social responsibility and inclusion.
Additionally, the EU’s investments in the green sector and in digital transitions address the environmental pillar of ESG, helping companies adopt sustainable practices. The report also emphasises good governance, as EU funding through initiatives like the European Social Fund Plus (ESF+) is carefully managed to ensure long-term social and economic benefits. These policies and reforms provide a strong framework for companies to integrate ESG into their strategies, ensuring sustainable growth and equitable development.
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European Commission takes action to ensure complete and timely transposition of EU directives
The European Commission has initiated infringement procedures against 17 member states for failing to fully transpose the CSRD. These notices serve as formal warnings, giving the countries two months to address the shortcomings or face potential legal action, including the issuance of a reasoned opinion. The 17 member states concerned have not yet communicated full transposition into national law of the provisions of the CSRD. The transposition deadline expired on 6 July 2024.
Estonia and Latvia have been cited for not fully implementing the CSRD and all three Baltic states for not transposing the provisions of the revised Renewable Energy Directive.
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Adoption of the revised EU ETS Monitoring and Reporting Regulation
On 23 September, the European Commission amended the EU Emissions Trading System (ETS) Monitoring and Reporting Regulation, introducing zero-rating for emissions from certain low-carbon fuels, including renewable fuels and synthetic fuels. The revisions also enhance regulations for biomass and sustainable aviation fuels to ensure compliance with sustainability criteria and prevent double counting of emissions.
The amendments include improved rules for CO2 transfer and emissions deemed permanently chemically bound in products. They also establish monitoring and reporting requirements for non-CO2 effects from aviation, such as persistent contrails and NOx particles, with the new system set to be operational by 2025.
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F-gases: new rules on labelling, reporting, certification and the F-gas Portal
The European Commission has introduced an Implementing Regulation outlining new requirements for F-gas labels on containers and specific products, which is set to take effect on 1 January 2025. Until then, the existing labelling requirements from the previous F-gas Regulation (EU) No 517/2014 will remain in force. Additionally, a new format for the annual F-gas report has been established, which companies must use starting 31 March 2025, for reporting data from 2024. The previous reporting requirements will continue until the end of 2024.
The regulation also establishes minimum certification requirements for technicians working with various refrigeration and air-conditioning systems, including those using alternatives to F-gases. This marks a shift from the previous regulations, which only covered F-gases. Member states have a year to adjust their certification programmes accordingly. Furthermore, the regulation provides detailed rules for the F-gas Portal: the Commission’s IT platform for managing hydrofluorocarbon quotas, issuing trade licenses, and facilitating reporting.
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Contact the authors:
Co-head of Sorainen ESG team, Counsel, Lithuania
vitalija.impoleviciene@sorainen.com
Senior Associate, Latvia
Associate, Estonia
