Impacts of current Luxembourg legislation

The Draft CSR Bill proposes the amendment of several laws that regulate the accounting and reporting obligations of Luxembourg companies and partnerships, including, the Luxembourg law of 19 December 2002 on the register of commerce and companies and the accounting and annual accounts of companies (the 2002 Law), the Luxembourg law of 10 August 1915 on commercial companies, the Luxembourg law of 17 June 1992 on the accounts of credit institutions and the Luxembourg law of 8 December 1994 on the annual and consolidated accounts of insurance and reinsurance companies.

In addition, the Draft CSR Bill proposes to amend the Luxembourg law of 23 July 2016 on the audit profession and the Luxembourg law of 11 January 2008 on the transparency requirements for issuers.

It is worth noting that on 28 July 2023, draft bill 8286 was submitted to the Luxembourg parliament with the aim of overhauling Luxembourg accounting law and proposing, among other, to amend the 2002 Law (the Accounting Draft CSR Bill).

As the Draft CSR Bill has not taken into account the Accounting Draft CSR Bill  and is based on current accounting law, the interaction between the  Draft CSR Bill and the Accounting Draft CSR Bill should be closely followed.

Implementation and scope of the Draft CSR Bill

A considerable number of Luxembourg companies could potentially come under the scope of the draft CSR Bill. It is worth noting, for example, that Recital 26 of the CSRD expressly provides that an entity may, in certain circumstances, be exempted from consolidated financial reporting requirements but not from consolidated sustainability reporting requirements.

While the Draft CSR Bill provides for an exemption for certain financial products such as AIFs and UCITS, asset managers will need to consider its application at the level of the portfolio companies which they manage.

The Draft CSR Bill opted for a gradual implementation approach, as follows:

Category Thresholds Application Date

Large listed companies (EU and Non-EU)

Listed parent companies of a large group (EU and Non-EU)  

Exceed at least two of the three following thresholds:

  • EUR 25M balance sheet total
  • EUR 50M net turnover
  • 500 employees  
 Applicable for the financial years starting on or after 1 January 2024  

Large listed and non-listed companies (EU and Non-EU)

Listed and non-listed parent companies of a large group (EU and Non-EU)  

Exceed at least two of the three following thresholds:

  • EUR 25M balance sheet total
  • EUR 50M net turnover;
  • 250 employees
 Applicable for the financial years starting on or after 1 January 2025  

Listed Small and medium enterprises (SME) (EU and Non-EU)

Small and non-complex credit institutions that are large listed or non-listed companies (EU and Non-EU)

Captive insurance undertakings that are large listed or non-listed companies or listed SME’s (EU and Non-EU)

Exceed at least two of the three following thresholds:

  • EUR 25M balance sheet total
  • EUR 50M net turnover
  • 250 employees  
 Applicable for the financial years starting on or after 1 January 2026  
Non-EU companies having EU subsidiaries or branches  
  • Generate a turnover of at least EUR 150M per year, and
  • Either: (a) have an EU subsidiary which is a large company or a listed SME or (b) have an EU branch generating a yearly turnover of more than EUR 40M  
 Applicable for the financial years starting on or after 1 January 2028  

 

More publications on the CSRD, and other sustainability legislation, can be found on our dedicated ESG webpage.