Belgium transplants EU corporate sustainability

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On November 28, 2024, the Belgian Parliament passed a bill to incorporate the EU Corporate Sustainability Reporting Directive (CSRD) into national law, resolving the overdue deadline of July 6, 2024.

This legislative step follows Belgium’s postponement of the transposition and the subsequent formal notification by the European Commission calling on Belgium (together with 16 other member states) to implement CSRD obligations to increase transparency in corporate sustainability across EU member states. .

Companies should ensure they are aware of the new obligations under the legislation.

The CSRD imposes broader sustainability reporting requirements on companies, requiring information on environmental, social and governance (ESG) factors to comply with the European Sustainability Reporting Standard (ESRS) adopted by the European Commission. CSRD aims to ensure that companies provide consistent, comparable and reliable sustainability information. Belgium’s transition aligns local requirements with these obligations, extending the previous non-financial reporting framework to include standardized, comparable ESG disclosures critical to EU-wide transparency and investor decision-making.

Certain large Belgian companies that are public interest entities are already required to submit non-financial reports, including social and environmental standards in accordance with the current NFRD. However, these obligations are less detailed and stringent than those under the CSRD that aim to harmonize and strengthen sustainability reporting requirements. Companies within the scope of CSRD are required to report in-depth data on climate impacts, workforce diversity, human rights and anti-corruption measures. Reports must comply with ESRS, cover risks, impacts and governance, and emphasize verifiability and comparability. Companies will need to adapt (and if necessary modify) their existing data collection and reporting frameworks, which requires adequate preparation and cross-department coordination.

New reporting obligations under the CSRD will be implemented in phases over the next few years based on company size and other factors, starting with companies already subject to NFRD obligations. These companies will be required to report for fiscal years beginning on or after January 1, 2024. Other companies will benefit from a delay of one or more years.

Failure to comply with CSRD obligations can result in significant regulatory fines, audits and potential reputational damage.

The law must now be published in Belgium’s Official Gazette to officially enter into force.

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