CSRD implementation in Belgium: Key changes and Omnibus effects

The CSRD introduces several critical changes:

• Standardised reporting requirements: Companies in scope must report in compliance with the European Sustainability Reporting Standards (ESRS), ensuring uniformity and comparability.
• Mandatory assurance of sustainability information and audit requirements: Sustainability information must be audited by an accredited independent auditor or certifier to ensure reliability and reduce the risk of greenwashing. The assurance of sustainability information can be carried out by the company's auditor, another auditor, or an independent assurance service provider.
• Digital reporting: Companies must submit their reports in a digital, machine-readable format (ESEF) to facilitate transparency and accessibility.
• Double materiality: Companies in scope must assess and report on both how sustainability factors affect their operations and how their activities impact the environment and society. 
• Extension of the reporting requirements to certain non-EU undertakings: Fair competition conditions between European companies and their non-European competitors economically active in the EU market is ensured by subjecting the latter to a similar reporting obligation.

To implement these new measures, the CSDR Implementation Act amends the following Belgian legislations:

• The Belgian Companies and Associations Code (BCCA): provisions of the BCCA that were inserted to implement the NFRD into Belgian law, as well as Title 4 of Part 1 of Book 3 of the BCCA relating to the statutory audit of annual accounts and consolidated accounts of companies with legal personality are amended.
• The Law of 7 December 2016 on the organisation of the profession and public supervision of company auditors: The amendments to this law, combined with those made to Title 4 of Part 1 of Book 3 of the BCCA, aim to implement the new rules on the assurance of sustainability information.
• The Law of 2 August 2002 on the supervision of the financial sector and financial services: The CSRD amends the Transparency Directive, which defines the obligations of listed companies regarding periodic information because sustainability information will be part of this periodic information. The amendments aim to: (i) allow the King to specify the obligations imposed on listed companies whose periodic information is controlled by the FSMA regarding the sustainability information to be provided to the public and (ii) specify the persons who will be responsible, in listed companies, for the assurance of sustainability information, alongside those responsible for the audit of financial statements.

The CSRD Implementation Act closely mirrors the CSRD’s framework, but also introduces some Belgian-specific elements by the use of options.

• Safe harbour provision: Belgium incorporates an option to protect confidential information, allowing companies to withhold certain sensitive details if disclosing them could harm their competitive position. 
• SME safeguards: To alleviate the administrative burden on SMEs within the value chain, the law includes a protection mechanism. SMEs should not be asked for more information than what is reasonably required by the European sustainability reporting standards for SMEs, and there is a prohibition on requiring a certain level of assurance regarding information coming from SMEs in the value chain. 
• Audit adjustments and assurance reporting: Auditors are tasked with the assurance of companies’ sustainability information, and new training requirements will qualify more auditors to handle both financial and sustainability audits.
• Employee engagement: Employee representatives (i.e. the works council) must be informed about the sustainability data, ensuring transparency within the workforce.
• Sanctions: Non-compliance may lead to criminal and administrative penalties, emphasising the serious commitment to sustainability reporting. For listed companies, administrative oversight will fall to the FSMA, which can enforce compliance through measures such as public warnings or financial penalties.

The Omnibus aims at reducing the reporting burden by different measures including   

• Restrictions on information requests: The EU Commission proposes restrictions on information requests along the value chain. This could limit the extent of data collection and reporting required from companies, thereby reducing the administrative burden associated with compliance under both the CRSD and EU Taxonomy. 
• Remove the possibility of moving from a requirement for limited assurance to a requirement for reasonable assurance. 
• Streamline and simplify ESRS by reducing mandatory datapoints, prioritising quantitative over narrative data, and distinguishing between mandatory and voluntary datapoints. It will also clarify unclear provisions, improve consistency with EU legislation, and enhance interoperability with global standards. 
• The EU Commission plans to implement an “opt-in” regime for large companies with specific turnover criteria. This “opt-in” approach will eliminate compliance costs for large enterprises with over 1,000 employees and a net turnover not exceeding EUR 450 million, provided they do not claim their activities are environmentally sustainable under the EU Taxonomy. It also allows these enterprises to report on activities that meet some of the EU Taxonomy’s technical criteria, encouraging a gradual environmental transition and supporting the goal of increasing transition finance. 

More information on the Omnibus simplification package can be found on our website.

The CSRD Implementation Act plans a phased implementation of the CSRD in Belgium over the coming years. 

• First wave: large Belgian public-interest entities, i.e. essentially, large companies with regulated market listed securities, credit institutions and insurance companies with more than 500 employees (already subject to the NFRD) will start reporting under the new CSRD standards for the financial year 2024.
• Second wave: reporting requirements will expand to other large Belgian undertakings not previously subject to the NFRD, which meet at least two of the following criteria, as the case maybe on a consolidated basis: i) employment of more than 250 people; ii) a balance sheet total exceeding EUR 25 million; and/or iii) an annual turnover greater than EUR 50 million. The reporting requirements will start in 2026 for the 2025 financial year. 
• Third wave: listed Belgian SMEs, with the exception of micro-companies, will need to comply, starting in 2027 for the 2026 financial year (with an option to opt out until 2028). 
• Fourth wave: third country companies subject to the CSRD will start reporting in 2028 for the 2027 financial year. This concerns non-EU companies with a net turnover of more than EUR 150 million in the EU for two consecutive financial years and having i) a listed or large subsidiary in the EU; or ii) a branch generating more than EUR 40 million in the EU in the previous financial year.

However, the Omnibus aims to postpone the second wave and third wave by two years. The Omnibus does not provide for any express postponement of the deadline for the fourth waves which can be explained by the aim of the Omnibus to reduce the scope of CSRD to only very large undertakings. 

The CSRD Implementation Act imposes sustainability reporting obligations on the following types of companies:

Large companies

These are companies that exceed at least two of the following criteria for two consecutive financial years at the balance sheet date:

• A total balance sheet of EUR 25 million;
• An annual net turnover (referred to in Article 1:26/1 BCCA) of EUR 50 million; and
• An average annual workforce of 250 employees.

Currently, the category of "large company" does not exist in the BCCA. The text therefore provides for the creation of this category in Belgian law (Article 3:6/1, §1, 1° BCCA) solely for the inclusion in the management report of information on sustainability and essential intangible resources, according to the same criteria defined in the accounting directive (which were recently amended by Delegated Directive (EU) 2023/2775). It is specified that exceeding or no longer exceeding more than one of the aforementioned criteria only has an impact if this circumstance occurs for two consecutive financial years. In this case, the consequences of this exceedance will apply from the financial year following the year in which, for the second time, more than one of the criteria have been exceeded or are no longer exceeded.

Financial institutions

For clarity, the CSRD Implementation Act specifies that the following Belgian public interest entities are in scope, regardless of their legal form:

• Credit institutions referred to in Article 1:12, 3° BCCA, and
• Insurance and reinsurance companies referred to in Article 1:12, 4° BCCA.

These companies must have exceeded the size criteria applicable to "large companies" for at least two consecutive financial years.

Listed companies

These are companies referred to in Article 1:12, 1° and 2° of the BCCA, namely (i) listed companies referred to in Article 1:11 BCCA and (ii) companies whose securities referred to in Article 2, 31°, b) and c), of the law of 2 August 2002, are admitted to trading on a regulated market referred to in Article 3, 7°, of the law of 21 November 2017, relating to the infrastructure of financial markets.

However, micro listed companies are excluded being those which, at the balance sheet date of the last closed financial year, do not exceed more than one of the following criteria:

• An average annual workforce of 10 employees;
• An annual net turnover (referred to in Article 1:26/1 BCCA) of EUR 900,000; or
• A total balance sheet of EUR 450,000.

A key change to the scoping of the CSRD in the Omnibus is that only (very) large undertakings will be in-scope. The proposed thresholds on a stand-alone and, if applicable, consolidated basis will be:

• Average number of employees: more than 1,000; and
• Turnover: either above EUR 50 million or a balance sheet above EUR 25 million

With these increased thresholds, listed SMEs would no longer be subject to the CSRD. 

Non-EU undertakings

A “third country” is defined as a jurisdiction that is not a member state of the European Union nor, insofar as the agreement regarding the European Economic Area provides for it, a State that has signed this agreement.

Non-EU undertakings in scope of the CSRD Implementation Act are defined by reference to their net turnover (see definition below) in the EU, which must exceed EUR 150 million during two consecutive financial years.

When they meet this criterion, they are considered in scope of CSRD and the CSRD Implementation Act in case they have:

• a subsidiary in Belgium that meets the large undertaking criteria provided in Article 3:6/1, §1, 1° BCCA (see above); or
• a listed subsidiary in Belgium that meets the criteria provided in Article 1:12, 1° and 2° BCCA; or
• a Belgian branch office that meets the criteria provided in Article 3:20/4 BCCA with a turnover exceeding EUR 40 million in the EU in the most recent financial year.

Exclusions

General partnerships, limited partnerships and GEIE:  Companies formed as a general partnership (vennootschap onder firma/société en nom collectif), or a limited partnership (commanditaire venootschap/société en commandite) are excluded from the scope of the CSRD Implementation Act when all partners with unlimited liability are individuals. The same applies to European economic interest groups (GEIE).

Certain financial products:  Financial products listed in Article 2, point 12), b) and f), of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR) are excluded from the CSRD Implementation Act. This exclusion particularly concerns undertakings for collective investment in transferable securities (UCITS) and alternative investment funds (AIFs).

National Bank of Belgium: The National Bank of Belgium is excluded from the obligation to report on sustainability information in its management report. However, the NBB is required to include information on essential intangible resources. 

Net turnover 

The CSRD has adopted the term "net turnover" by referring to the definition in Directive 86/635/EEC, instead of the general definition stated in the Accounting Directive. The definition established by the Accounting Directive has been amended accordingly.

Article 6 of the CSRD Implementation Act inserts a Chapter 2/1 entitled "Net Turnover" in Part 1, Book 1, Title 5 of the BCCA with a new Article 1:26/1 which defines net turnover as:

• the amount resulting from the sale of products and the provision of services, less sales discounts, value-added tax, and other taxes directly related to turnover;
• for insurance or reinsurance companies, the amount defined in accordance with Art. 199, § 2, of the Law of 13 March 2016, on the status and supervision of insurance or reinsurance companies;
• for credit institutions, the amount defined in accordance with Article 106, § 1, 2°, of the Law of 25 April 2014, on the status and supervision of credit institutions, and its implementing decrees;
• for third-country companies, the revenue as defined by the financial reporting framework on the basis of which the company's financial statements are prepared or within the meaning thereof.