ESG news: Italy launches a public consultation on draft decree implementing the CSRD

The CSRD aims to promote transparency and disclosure of information by companies on the environmental, social and governance-related (ESG) impact of their activities, through enhanced corporate reporting requirements.

The CSRD entered into force on 5 January 2023 and Member States are required to transpose it into national laws by 6 July 2024. In this context, on 16 February 2024, the MEF launched a public consultation on the draft decree implementing CSRD in Italy.

The draft decree aims to:

• Broaden the scope of sustainability reporting requirements which will apply to:
  • all large companies and parent companies of large groups, including unlisted companies. The scope of application of the draft decree explicitly includes credit institutions and insurance companies regardless of their legal form;
  • small and medium-sized companies (provided they have financial instruments admitted to trading on regulated markets and with the exclusion of micro-enterprises);
  • third-country companies (subject to certain requirements).
• Impose common standards defined at European level (ESRS) for the drafting of the sustainability report.

Obliged entities will need to disclose the information necessary to understand the company's impact on sustainability matters and how the sustainability affects the performance of the company, its results and its situation.

The draft decree specifies the minimum content of the reporting obligation, the requirements for the conformity certification needed for the sustainability report, the appointed competent supervisory authorities, the sanctions in case of non-compliance and the transitional provisions.

Next steps

The public consultation, available here (in Italian only), will be open until 18 March 2024.

After the adoption of the decree implementing CSRD, the application of the provisions will take place gradually over time depending on the type of entities to whom the provisions are addressed.

Authored by Jeffrey Greenbaum, Elisabetta Zeppieri, and Rebecca Carbone.