The Directive 2022/2464 on the disclosure of sustainability information by companies, commonly referred to as the “CSRD” (the acronym for “Corporate Sustainability Reporting Directive”), has not yet been transposed into Belgian law.

The ultimate deadline for the transposition of the directive’s provisions was July 6, 2024.

Belgium is not the only country in this situation. As of October 15, 2024, only 14 member states had proceeded with the transposition.

This presents a major issue, as the new rules on the disclosure of sustainability information are supposed to apply for the first time to financial years beginning on January 1, 2024.

Without the transposition of the new rules, the necessary level of harmonization within the European Union will not be achieved. The European Commission, therefore, initiated infringement procedures at the end of September against member states that had not met the transposition deadline. Belgium is one of the states that received a formal notice from the European Commission.

According to information on the process of transposing European directives published by the FPS Foreign Affairs, Foreign Trade, and Development Cooperation as of September 30, 2024, the announced date for the full transposition of Directive 2022/2464 is January 2025.

A first draft of the law transposing Directive 2022/2464 was drawn up at the end of 2023 and communicated to certain stakeholders. In some respects, this draft was more ambitious than the directive itself. This led certain institutions, such as the Federation of Belgian Enterprises, to urge the government to consider a law that was closer to the European text.

A draft law was finally approved by the Council of Ministers during the second quarter of 2024 and submitted for review by the Data Protection Authority and the Council of State. However, no bill has yet been tabled.

The President of the Institute of Company Auditors recently highlighted the urgency of the situation in a press release dated October 4, 2024, not only in the interest of Belgian companies but also in the interest of the auditors who will have to verify the reports prepared by companies on sustainability matters.

How to prepare in these circumstances?

For Belgian companies, the lack of transposition creates an unenviable situation in terms of legal predictability.

Belgium, in principle, cannot decide to postpone the entry into force of the sustainability information disclosure obligations.

The date of January 1, 2024, is specified in Directive 2022/2464 and cannot be changed by member states.

The European Commission, for example, initiated infringement proceedings against Sweden, which had transposed Directive 2022/2464 into its national law but had set the disclosure obligations to begin for fiscal years starting from July 1, 2024. This meant that companies whose fiscal year began on January 1, 2024, and fell within the scope of the directive were only required to disclose sustainability information starting from January 1, 2025. According to the European Commission, this delay created the risk of “unequal competitive conditions” between companies within the European Union located in different member states.

While waiting for the adoption of the law transposing Directive 2022/2464, Belgian companies subject to the disclosure obligations outlined in the directive for financial years starting on or after January 1, 2024, can certainly begin preparing and gathering the necessary information for publication with their 2024 financial statements.

However, the obligations imposed on Belgian companies may not necessarily be identical to those derived from the directive. In particular, the situation could become uncomfortable if companies are subject to disclosure obligations based on criteria other than those defined by the directive. It is worth recalling that during the transposition of Directive 2014/95/EU on the disclosure of non-financial and diversity information by certain large companies and groups into the law of September 3, 2017, the Belgian legislator had set lower financial thresholds than those in the directive. As a result, a greater number of Belgian companies were subject to the non-financial information disclosure obligations.

At the end of 2023, the FSMA (Financial Services and Markets Authority) published a communication addressed to companies listed on the Euronext regulated market. The FSMA is responsible for overseeing the information disclosed by listed companies. In this communication, the FSMA provides various suggested actions for listed companies to prepare for the new information disclosure obligations.

The Federation of Belgian Enterprises also, in collaboration with PwC, published a practical guide for large companies on the new ESG reporting requirements.

Gautier Matray