SARAS Publishes Information on the Implementation of the New EU Corporate Sustainability Reporting Requirements in Georgia

In 2022, the European Commission developed a Corporate Sustainability Reporting Directive (CSRD), which came into force for EU member states on 5 January 2023. This Directive replaces the existing Non-Financial Reporting Directive with an updated edition and requirements. The companies are required to prepare corporate sustainability reports in accordance with the relevant standard for the reporting period of 2024. They must submit the reports to local authorities from 2025. The implementation of the new directive in the country is a complex issue and will clearly be the step-by-step process. 

SARAS considers it appropriate to apply the above-mentioned requirements in Georgia to the 1st category enterprises and Public Interest Entities (PIEs) (except for the 4th category enterprises) and to implement them from 2027, in relation to the 2026 reporting period. The new requirements will affect entities across the EU.

The CSRD requires entities to prepare corporate sustainability reports. If they are:
(1) Large entities, regardless of whether they are public interest entities;
(2) Small and medium-sized enterprises (SMEs) (excluding micro-enterprises) that are public interest entities;
(3) non-EU entities that have a branch or subsidiary in the EU.

Accountable entities are required to disclose information on how environmental and social issues affect the risks and challenges they face. They must also disclose information on the impact of their business model on people and the environment.  The new regulatory framework will help investors, civil society, consumers and other stakeholders to assess the company's sustainable development potential and current performance in the context of EU legislative initiatives to strengthen the green economy.

In order for Georgia to meet the requirements of the European Union within the framework of dynamic approximation, SARAS plans to:
• work with representatives/experts from EU Member States to ensure dynamic approximation with regulatory directives and implementation of corporate sustainability reporting standards in Georgia. To this end, initiate appropriate legal procedures with the standard setting body (www.efrag.org);
• raise awareness among interested parties and accountable entities, provide relevant training for professionals;
• In 2024, taking into account the recommendations of the EU Member States, develop the draft law of Georgia on amendments to the Law of Georgia "On Accounting, Reporting and Auditing", and by 2025 submit the draft law to the Ministry of Finance of Georgia/Government of Georgia for further initiation; 
See other news related to this topic:

The EU Approves New Requirements for Corporate Sustainability Reporting
European Commission Releases New Sustainability Reporting Standards