Publication
Taiwan: Competition law fact sheet
Main features of the law - Prohibition on restrictive agreements, concerted practices, abuses of a dominant position, unfair trade practices and M&A activities that restrict competition in Taiwan.
United Kingdom | Publication | February 2023
On 28 November 2022, the European Council approved the adoption of the Corporate Sustainability Reporting Directive (the CSRD). The CSRD was subsequently published in the Official Journal on 16 December 2022 and entered into force on 5 January 2023.
The CSRD requires ‘in scope’ businesses to report and disclose information on their societal and environmental impact and external sustainability factors affecting their business.
The move from “non-financial disclosures” to “sustainability” disclosures represents a significant shift by the EU towards a sustainable economy with increased corporate accountability and places financial and sustainability reporting on an equal footing.
The CSRD amends:
Summaries of the key CSRD requirements under the NFRD and the TD are set out below.
The CSRD requirements will apply to the following undertakings:
EU Undertakings |
|
Non-EU Undertakings |
a) a turnover at group level of over €150 million in the EU; and b) an EU subsidiary that is subject to the CSRD requirements because it has securities admitted to trading on a regulated market or is a large undertaking (see above) or an EU branch that has generated a net turnover of more than €40 million in the EU. |
Requirement |
CSRD |
Reporting Requirements |
Information must be clearly identifiable in a section of the management report and will cover sustainability matters including (amongst others):
Where applicable, the information included in the management report shall also include information about the undertaking’s own operations and about its value chain, including its products and services, its business relationships and its supply chain. Small and medium-sized undertakings, small and non-complex institutions and captive insurance and reinsurance undertakings may choose to limit its sustainability reporting as long as certain standards are met. |
Reporting requirements at consolidated level |
Sustainability reporting will be done at group level by parent entities of a large group (meeting the same criteria as for large undertakings but at group level). The sustainability reporting should be reflected in a dedicated section of the consolidated management report and include information necessary to understand the group’s impacts on sustainability matters, and information necessary to understand how sustainability matters affect the group’s development, performance and position. If a parent’s consolidated management report contains all relevant information, ‘in scope’ subsidiaries may be exempt from sustainability reporting. |
Standards |
Undertakings will be required to report on sustainability according to mandatory reporting standards. The European Financial Reporting Advisory Group (EFRAG) are developing a framework of reporting standards which will apply to (i) topics and (ii) sectors. Topical standards were drafted by EFRAG on 23 November 2022 which cover the following topics:
Sectorial standards will be developed by EFRAG to cover:
Separate reporting standards for small and medium-sized undertakings and third-country undertakings will also be developed. The European Commission is expected to adopt the standards in their final form in June 2023 and 2024 respectively. |
Auditor’s assurance |
Mandatory requirement for review of disclosures and assurance by a statutory auditor or independent assurance services provider that there has been no material misstatement in company’s disclosures. Until the appropriate standards for a reasonable assurance of sustainability reporting are put in place (expected to be in place no later than 1 October 2028), assurance will need to be given on a limited assurance basis. In such case, the conclusion would be provided in a negative form of expression by stating that no matter has been identified to conclude that the matters in the sustainability reporting are materially misstated. Once the relevant standards have been adopted, assurance will need to be given on a reasonable assurance basis whereby more procedures and substantive testing will be involved and a conclusion is provided in a positive form of expression and results measured against pre-defined criteria. |
Additional disclosure for issuers having issued low-denomination (i.e. less than €100,000 or equivalent) securities |
Issuers are required to make public the annual report at the latest 4 months after the end of each financial year and continue to make it available for at least 10 years. The annual report must include a statement by persons responsible within the issuer to the effect that, to the best of their knowledge, the management report is prepared in accordance with the applicable sustainability reporting standards. The auditor’s sustainability related assurance report must also be disclosed in full to the public together with the annual financial report. Under the proposed EU Listing Act’s amendments to the EU Prospectus Regulation, any sustainability reporting included in the management reports and audit reports would be able to be incorporated by reference in a prospectus. |
Digital Tagging |
Requirement to prepare annual financial reports in XHTML format and mark sustainability information in financial statements and management reports with a digital ‘tag’ so that it is machine readable. |
Equivalence for ‘in scope’ non-EU undertakings |
Non-EU undertakings subject to the CSRD will be permitted to report on sustainability matters using 'equivalent standards' to those set out under the CSRD. Guidelines as to which standards will be deemed 'equivalent' for this purpose will be developed by the European Commission. |
Even though the CSRD entered into force on 5 January 2023, its requirements will be gradually phased in for ‘in scope’ undertakings between 2024 and 2029:
Relevant ‘in scope’ undertakings | Financial year: | Report due in: |
EU and non-EU undertakings whose securities are admitted to trading on an EU regulated market and that satisfy both of the following:
|
2024 |
2025 |
EU undertakings that meet the criteria for large undertakings (see above) but whose securities are not admitted to trading on an EU regulated market. Non-EU undertakings whose securities are admitted to trading on an EU regulated market and who meet the criteria for large undertakings (see above) but have less than 500 employees. |
2025 |
2026 |
All other EU and non-EU undertakings whose securities are listed on an EU regulated market (i.e. those who are neither large nor micro undertakings – see above) [*: For a transitional period of two years, small- and medium sized EU and non-EU undertakings with securities on an EU regulated market have the possibility to opt-out from CSRD reporting requirements, provided that they briefly explain in their management report why the required sustainability information has not been included.] |
2026 [or 2028*] |
2027 [or 2029*] |
Non-EU undertakings who do not have securities listed on an EU regulated market but which have (i) a turnover at group level of over €150 million in the EU and (ii) a subsidiary that is a large undertaking or a branch having a net turnover of at least €40 million in the EU |
2028 |
2029 |
It is estimated that 50,000 companies will be covered by the new rules, compared to about 11,700 companies covered by the current rules under the NRFD and the TD. Both EU and non-EU groups and companies will need to assess the implications of the CSRD on their reporting and disclosure strategies and develop mechanisms to collect and monitor relevant, verifiable sustainability related data as well as disclose relevant information in a transparent and efficient manner backed by an independent verification.
The Norton Rose Fulbright Environment team will continue to monitor the CSRD as it gradually comes applicable and we will keep a close eye on the accompanying standards as they are developed. The Norton Rose Fulbright Capital Markets team is also on hand to assist issuers with any queries they may have.
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