Italy implements legislative decree on corporate sustainability reporting

On September 10, Italy published Legislative Decree No. 125/2024, which implements the EU Corporate Sustainability Reporting Directive (CSRD). This new decree introduces comprehensive changes to corporate sustainability reporting, replacing previous regulations. Key updates include expanded reporting requirements, the integration of sustainability information into the annual management report, and a focus on a “dual materiality” approach – assessing both how companies impact the environment and how ESG factors impact business operations.

Key innovations:

• Extension of reporting requirements to large companies, SMEs and non-EU companies with significant EU operations.
• Broader sustainability communication covering the entire value chain.
• Adoption of standardized reporting criteria (European Sustainability Reporting Standards – ESRS).
• Mandatory certification of the accuracy of sustainability data, with a move from limited assurance to potential reasonable assurance.
• Digitization of reports through the European Single Electronic Format (ESEF).

Next steps:

Companies will need to comply with the new reporting requirements in stages, starting in 2024 for large companies, with SMEs and non-EU groups following in subsequent years. Companies should prepare for the certification process and ensure the digitization of sustainability data for accessibility through the European Single Access Point (ESAP).

Recommendation:

Italian companies should start adapting their reporting systems to the requirements of the CSRD, focusing on the inclusion of comprehensive sustainability data, ensuring accurate value chain disclosure, and preparing for the certification and digitization processes. Early adaptation will facilitate compliance and improve transparency with stakeholders.