ESG

Sustainability Reporting – Potential Omnibus Regulation

We expect to see a material update or publication from the European Commission on 26 February 2025 relating to the potential simplification of sustainability reporting obligations under the EU Taxonomy Regulation, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D).

For more information, read our briefing: Sustainability Developments: Possible Omnibus Simplification Package for Reporting; Possible move from SFDR Disclosures to Categorisation - Arthur Cox LLP.

ESMA Fund Name Guidelines take Effect

On 21 August 2024, ESMA published its Guidelines on funds’ names using ESG or sustainability-related terms (the Guidelines) in all official EU languages. The Guidelines apply from 21 November 2024 (the Application Date).

For funds in existence prior to the Application Date, a transitional period of six months applies, ending on 21 May 2025. New funds established on or after the Application Date must adhere to the Guidelines immediately.

The objective of the Guidelines is to ensure that investors are protected against unsubstantiated or exaggerated sustainability claims in fund names, and to provide asset managers with clear and measurable criteria to assess their ability to use ESG or sustainability-related terms in fund names.

For further detail on the Guidelines, please see here and for ESMA’s recently published Q&A on the Guidelines, please see here.

The Central Bank has published details on the filing process for updates to fund names and SFDR-related disclosures based due to the Guidelines.

For further detail on the Central Bank’s process, please see here.

EU Corporate Sustainability Due Diligence Directive (CS3D)

The CS3D will apply to certain large EU companies and non-EU companies operating within the EU and imposes obligations on in-scope companies to: (1) conduct due diligence related to adverse environmental and human rights impacts in their own operations, those of their subsidiaries and their chains of activities; and (2) adopt and implement a climate transition plan. ​

The CS3D is required to be transposed into national law by 26 July 2026 and it is anticipated that the Department of Enterprise, Trade and Employment will continue to work towards the transposition of the CS3D into Irish law throughout 2025, including potentially consulting upon and confirming its transposition policy.

For more, read our briefing: New Due Diligence Obligations for Corporates Enter into Force - Arthur Cox LLP.

EU Corporate Sustainability Reporting Directive (CSRD)

The CSRD requires in-scope companies to report annually on sustainability matters in accordance with European Sustainability Reporting Standards (ESRS). Reporting must be provided annually in the directors’ report in a machine-readable format and is subject to mandatory third-party assurance.

Sustainability reporting obligations, under the CSRD as transposed into law via Part 28 of the Companies Act, commence for the second phase of reporting companies, which includes large private companies and large companies listed other than on an EU regulated market, in respect of financial years commencing on or after 1 January 2025 (reporting year 2026).

For more, read our briefing: Corporate Sustainability Reporting Directive and Irish CSRD Obligations Amended - Arthur Cox LLP.

EFRAG continues to provide implementation support and guidance for reporting companies in relation to the CSRD and ESRS, with new Transition Plan Implementation Guidance expected to be finalised in 2025. EFRAG is also expected to continue to provide support for companies that are not within mandatory scope of the CSRD, following the release of its Voluntary Sustainability Reporting Standard for non-listed SMEs last December.

EU Deforestation Regulation (EUDR)

The EUDR requires in-scope operators and traders to comply with new due diligence obligations, to ensure that certain products traded on or exported from the EU market are “deforestation-free” and produced in accordance with the relevant legislation of the country of production. The EUDR applies to seven relevant commodities (cattle, cocoa, coffee, oil palm, rubber, soya and wood) and to specified derived products. Obligations under the EUDR were originally due to come into effect from 30 December 2024 however this was delayed to allow for a 12-month phasing-in period to ensure effective implementation. Obligations under the EUDR now apply from 30 December 2025 (and 30 June 2026 for SMEs).

For more, read our briefings: EUDR: New Supply Chain Obligations for Relevant Commodities and Products - Arthur Cox LLP and EU Deforestation Regulation: Proposed Delay - Arthur Cox LLP.