Among the new features introduced by the CSRD Directive compared to the former NFRD Directive is a significant extension of the scope of application. As a result, sustainability information and consolidated sustainability information will now cover “large undertakings” and “parent undertakings of a large group”.
In this regard, it should be noted that Delegated Directive (EU) 2023/2775 (currently being transposed in Luxembourg) raises the thresholds for “total balance sheet” and “consolidated total balance sheet” as well as “adjusted net turnover” and “adjusted consolidated net turnover” by 25%. These measures are intended both to take account of the significant inflation of recent years and to promote a certain reduction in the administrative burden.
It is expected that certain “large undertakings” and “parent undertakings of a large group” will now be reclassified as “medium-sized undertakings” or “parent undertakings of a medium-sized group” and that, as a result, they will fall outside the scope of the CSRD and will therefore be exempt from the obligation to prepare, file and publish sustainability information or consolidated sustainability information.
The increase in the thresholds applicable to “large undertakings” (Fig. A) and “parent undertakings at the head of a large group” (Fig. B) is presented below.
| “Large undertakings” category | Current thresholds Art. 3, para. 4 Dir. 2023/34/EU | New thresholds of Delegated Directive (EU) 2023/2775 | Change in % |
| a) total balance sheet: | € 20 million | € 25 million | + 25 % |
| b) “adjusted” net turnover: | € 50 million | € 50 million | + 25% |
| c) average number of employees during the financial year: | 250 | 250 | + 0 % |
| Category of “parent undertakings of a large group“ | Current thresholds Art. 3, para. 7 Dir. 2023/34/EU | New thresholds of the Delegated Directive (EU) 2023/2775 | Change in % |
| a) total balance sheet (consolidated): | € 20 million | € 25 million | + 25 % |
| b) ‘adjusted’ net turnover (consolidated): | € 50 million | € 50 million | + 25% |
| c) average number (consolidated) of employees during the financial year: | 250 | 250 | + 0 % |
It should be noted that the categorisation rules remain unchanged for the rest of the system as provided for in current accounting law, namely that in order to change from a lower category to a higher category or from a higher category to a lower category, at least two of the three size criteria must be exceeded or cease to be exceeded for two consecutive financial years.
Furthermore, in accordance with CNC doctrine (see CNC Q&A 19/019), exceeding or not exceeding at least two of the three size criteria only takes effect during the financial year following the financial year in which the criteria have been exceeded or non-exceeded for the second time.
In other words, if undertaking ABC was a large undertaking during the 2022 financial year and ceased to exceed two of the three (new) size criteria during the 2023* and 2024 financial years, it would then become a “medium-sized undertaking” during the 2025 financial year and would then be exempt from the obligation to prepare, file and publish sustainability information.
* Subject to Luxembourg exercising its option to take into account the new thresholds starting from financial years beginning on 1 January 2023.