Several changes in the new proposal from the Swedish government regarding CSRD implementation into national law

Background: 

The Swedish government has reworked the proposal for the implementation of CSRD into national Swedish law. The new proposal (“Lagrådsremiss”) contains several changes compared to the previous investigation (“SOU”), see the main news below.. 

What is the main news? 

• Timeline for implementation: The Swedish government proposes to postpone the implementation of CSRD-reporting for first year reporters. The proposal suggests that listed companies with more than 500 employees have to apply the new legislations for the fiscal year beginning after June 2024.
  This means that all these companies (except for those that have a split financial year) will have to apply the legislation for FY 2025 instead of 2024. If this proposal makes it all the way to become Swedish law, no companies will be subject to CSRD reporting for FY 2024. All other phase-in timing requirements are the same as previously suggested. 

• MSEK values for thresholds defined: EU has previously communicated changes of the size thresholds to reflect the impact of inflation and reduce the reporting burden. In the “Lagrådsremiss” the threshold values for what constitutes large companies/groups and listed medium and small companies in MSEK are defined. Please see the size criteria below:

Two out of three criteria needs to be exceeded in the two past fiscal years

• Exemptions in regard to specific corporate forms: Certain changes and clarification has also been made in the proposal in regards to which corporate forms are exempted from reporting, such as limited partnerships in form of kommanditbolag (please note, handelsbolag are still in scope) and institutions for occupational retirement provision  (tjänstepensionsföretag). In the proposal the Swedish government also clarifies that special funds, AIFs and securities funds are not in scope, but CSRD will apply for investment companies and fund managers. 
   

What happens next? 

It’s important to keep in mind that the “Lagrådsremiss” is a proposal and not a final legislation. Lagrådet will review and comment on the proposal’s compatibility with other laws and legislations, including EU-laws. This will be an important step in the process for this proposal since “Lagrådsremissen” exceeds what the Directive states regarding the implementation timing for listed entities. 

Following the comments from Lagrådet, the government will continue to work on the legislative proposal and finally submit a proposition to be voted on in Sveriges Riksdag. If there’s a majority vote for the proposal, the new reporting requirements will enter into force on 1 of July 2024. 

It is important to note that the EU Taxonomy is a specific regulation that is not affected by this proposal regarding the listed entities and the 2024 reporting. A listed company that is in scope of the Taxonomy regulation itself, will continue to report in accordance with that regulation for 2024.  

More information

See link to the new proposal Lagrådsremiss (pdf 3,22 MB)

See link to the previous investigation SOU (pdf 3,06 MB)

See link to the Swedish legislative process