The Minister for Enterprise, Tourism and Employment has made the European Union (Corporate Sustainability Reporting) Regulations 2025 (SI No 309 of 2025) (the Regulations).

The Regulations transpose the so-called “stop-the-clock” directive into Irish law, amending Part 28 of the Companies Act 2014 (the Act) and the Transparency (Directive 2004/109/EC) Regulations 2007.

In addition, the Regulations clarify the scope, definition of turnover and subsidiary exemptions under the Corporate Sustainability Reporting Directive (CSRD) as implemented in Ireland, addressing anomalies that had been identified in the original transposing regulations and raised with the Department of Enterprise, Tourism and Employment by Arthur Cox LLP and other professional advisers.

Key Changes at a Glance

Deferred Application Dates

The Regulations give effect to the two-year deferral under the “stop-the-clock” directive, for “wave 2” and “wave 3” companies.

Sustainability reporting obligations under Part 28 of the Act now apply for “applicable companies” as follows:

• Large Irish incorporated companies: obligations apply for financial years beginning on or after 1 January 2027 (first reports in 2028); and
• SMEs with securities listed on an EU regulated market, small and non-complex institutions, captive insurance and reinsurance undertakings: obligations apply for financial years beginning on or after 1 January 2028 (first reports in 2029).

The Irish Transparency Regulations have also been amended to transpose the “stop-the-clock” deferrals for in-scope issuers.

Definition of Net Turnover

The definition of “net turnover” for the purposes of calculating whether an entity is an “applicable company” under Part 28 of the Act is amended so that it aligns better with the definition of “net turnover” under the EU Accounting Directive.

The previous definition of “net turnover” had been broader in scope and included, in the case of a company whose ordinary activities include the making or holding of investments, the gross revenue derived from such activities. This captured a number of fund subsidiaries and special purpose vehicles, which may not otherwise have fallen within scope of Part 28.

Scope

The definition of an “applicable company” has been clarified. Companies that are classified as “large” solely because they are “ineligible entities” under Part 6 of the Act are now expressly excluded from scope. Previously, such entities were automatically deemed, regardless of their size, to be “large” companies.

As a result of the amendments, Irish SMEs and micro entities, including CBI regulated entities, insurance undertakings, credit institutions, MiFID firms, UCITS management companies and AIFMs will not be within scope of sustainability reporting obligations, unless they satisfy the appropriate size criteria (turnover, balance sheet total and employee numbers) for an “applicable company”.

The amendments also remove the early application of the reporting obligations that would otherwise have applied to many in-scope regulated SMEs.

Subsidiary Exemptions

The provisions on subsidiary exemptions have been expanded, consistent with the CSRD, so that an Irish in-scope company may be exempt from preparing its own sustainability report where the company and its subsidiaries (if any) are included in the group management report of an EU parent, drawn up in accordance with the consolidated sustainability reporting obligations of the EU Accounting Directive, as amended by CSRD.

Subsidiaries and Branches of Third Country Undertakings

The definitions of “applicable branch” and “applicable subsidiary” of non-EU undertakings have been reframed, including the introduction of a new definition of “ultimate parent undertaking”.

An Irish in-scope subsidiary will be required to produce a group-level sustainability report where its non-EU ultimate parent undertaking, at group level, generated a net turnover of more than EUR150 million in the EU for each of the preceding two consecutive financial years.  

Reporting obligations in respect of non-EU undertakings apply for financial years beginning on or after 1 January 2028 and this timeframe has not been altered by the Regulations.  

CSRD Horizon Scanning at a Glance

Meanwhile the CSRD continues to evolve at EU level. We are continuing to track the following ongoing developments:

• ESRS “Quick Fix” Delegated Act – to apply from financial years commencing 1 January 2025, providing that “wave 1” companies will not have to report additional information for FY2025 and FY2026 and extending certain phase-in reliefs, previously only available to companies with less than 750 employees, to all “wave 1” reporting companies.
• CSRD “Amendments” Proposal – the Council has adopted its negotiating mandate on this Omnibus proposal, which includes reducing CSRD scope and streamlining reporting obligations. Trilogue negotiations are expected later this year, once the European Parliament agrees its position.  Once adopted, Member States will have 12 months to transpose the directive.
• Revised ESRS – EFRAG plans to consult on simplified ESRS from 31 July to 30 September 2025, and to deliver its technical advice due to the Commission by 30 November 2025.

Please contact our ESG Group or your usual Arthur Cox contact if you require tailored advice on the impact of the Regulations.