Scope of application of the CSRD

The CSRD’s entry into force is phased in, depending on the type of entities concerned:

For more details on the practical application of the new thresholds and their effective date on the re-categorisation of companies and groups, please refer to the following webpage of the Commission des normes comptables du Luxembourg, which is updated on a regular basis: CSRD et rehaussement des seuils : implication pour les grandes entreprises et les entreprises mères à la tête d’un grand groupe (cnc.lu), as well as to Q&A CNC 24/034, 24/033  and 19/019 (only in French).

For credit institutions publishing their annual accounts in accordance with LUX GAAP (including the mixed regime), ‘net turnover’ is defined in Article 43(2)(c) of Directive 86/635/EEC on the annual accounts and consolidated accounts of banks and other financial institutions.

The items making up net turnover are shown below:

The IFRS framework does not contain a definition of ‘net turnover’ for banks. In the absence of a precise definition, it seems reasonable to consider that the net turnover includes at least the following items: interest receivable, income from securities and commissions receivable.

In order to determine the average number of employees during the financial year, the average number of full-time equivalent staff should be considered over the entire financial year, including any branches of the undertaking.

Subsidiary undertakings are exempted from sustainability reporting if a consolidated sustainability statement is prepared by their parent company, provided that they mention this exemption and refer to the consolidated sustainability reporting of their parent. This exemption does not apply to large undertakings which are public-interest entities.

However, non-listed undertakings which are subsidiaries of a parent undertaking established in a third country are exempted from sustainability reporting only if they are included in the consolidated sustainability reporting of that parent undertaking and if that consolidated sustainability reporting is carried out in accordance with the ESRS or in a manner equivalent to those standards, as determined in accordance with an implementing act on the equivalence. No equivalence has been determined to date.

For the first two years of application (2026 and 2027 financial years), SMEs whose transferable securities are listed on EU regulated markets may decide to opt-out from CSRD reporting requirements. In such cases, they shall briefly state in their management report why the sustainability reporting has not been provided.

More generally, transitional provisions have been set in relation to disclosure requirements as regards:

• Entity-specific disclosures for the first 3 annual sustainability reports.
• Value chain: for the first 3 years of their sustainability reporting under the ESRS, undertakings may limit upstream and downstream value chain information on policies, actions, and targets to information available in-house, and may omit upstream and downstream value chain information when disclosing certain metrics.
• Undertakings with less than 750 employees may omit:
  • Scope 3 GHG emissions data and the disclosure requirements specified in the standard on “own workforce” in the first year that they apply the standards.
  • The disclosure requirements specified in the standards on biodiversity and on value-chain workers, affected communities, and consumers and end-users in the first two years that they apply the standards.
• Presenting comparative information: omission of comparative permitted for the first year of reporting.

Please refer to ESRS 1, Chapter 10 and Appendix C, for more detailed information about transitional provisions and phased-in disclosure requirements for each ESRS standard.