In a very welcome development, the Minister for Enterprise, Trade and Employment signed the European Union (Corporate Sustainability Reporting) Regulations 2025 (the 2025 Regulations) into law on 7 July 2025. The 2025 Regulations amend Part 28 of the Companies Act 2014 (the 2014 Act), which was introduced last year to transpose the Corporate Sustainability Reporting Directive (CSRD) into Irish law.
The amendments introduced by the 2025 Regulations align the Irish corporate sustainability reporting regime with CSRD by remedying certain anomalies identified by ALG and other law firms. This is good news for ‘Ireland Inc’ and goes a long way to restoring Ireland’s reputation as a business-friendly jurisdiction, particularly for small and medium-sized enterprises (SMEs).
What’s changed?
Previously, the definition of “applicable company” in Part 28 captured what the 2014 Act terms “ineligible entities”, a quirk of the Irish legislation. This caused the Irish regime to be out of step with CSRD – requiring some companies to report at an earlier reporting stage than intended, or to report when they should have been exempt. The types of companies affected included SMEs, unlisted PLCs, PLCs listed outside the EU, and regulated entities. The 2025 Regulations clarify that a company shall not be deemed to be large simply because it is an ineligible entity.
The definition of “net turnover” has been amended to better reflect the definition in the EU Accounting Directive. The previous definition, drawing from definitions in Part 6 of the 2014 Act, had been overly broad for the purposes of CSRD, as it required entities to include gross revenues derived from holding investments when calculating their turnover. This captured a number of fund subsidiaries and special purpose vehicles, which otherwise might have been beyond the scope of Part 28.
The subsidiary reporting exemptions envisaged by CSRD are now clearly available to Irish companies. An Irish company may now be exempt from preparing its own sustainability report where the company and its subsidiaries (if any) are included in the group management report of the Irish company’s EU parent.
The reporting obligations of Irish subsidiaries with third-country parent undertakings have also been clarified to ensure alignment with CSRD. Part 28 now provides that an Irish subsidiary will be obliged to report at the group level only where its third-country parent is the group’s ultimate parent.
The 2025 Regulations also delay, by two years, the commencement of reporting waves 2 and 3 of CSRD, as prescribed by the EU’s ‘Stop the Clock’ Directive. Companies required to report in these waves now have a reprieve until financial years 2027 and 2028 respectively.
Check out ALG’s ESG & Sustainability hub for our latest thinking on this and other ESG developments.
