On 26 February 2025, the European Commission announced its omnibus proposals to simplify certain EU ESG laws. This announcement included proposals (the CSRD Omnibus Proposals) to amend the EU’s Corporate Sustainability Reporting Directive (CSRD). The effect of the CSRD Omnibus Proposals, if adopted as proposed by the European Commission, would be to significantly scale back CSRD reporting obligations - which is a positive development from the perspective of Irish special purpose vehicles (SPVs).
This note outlines the potential impact of the CSRD Omnibus Proposals on Irish SPVs at a high-level. Irish companies come into scope for CSRD reporting on a phased basis. There is no specific carve-out for SPVs. Matheson has separately prepared and shared a detailed legal insight in relation to the CSRD Omnibus Proposals here.
Timing
The proposed amendments to the scope of application of CSRD are contained in a Directive, which proposes a range of amendments to CSRD and other EU ESG laws. There is no certainty that the EU legislative process will be quick and the proposals could be amended as they work their way through the legislative process. The average time from European Commission proposal to a Directive being finalised has in the past been somewhere in the region of 9 to 15 months. The final Directive must then be transposed into the national laws of each EU country (including Ireland).
The European Commission intend to move forward the necessary legislation to facilitate the two-year delay described below in a separate, shorter Directive. The European Commission envisages that this Directive could become law and be transposed into the national laws of each EU country, including Ireland, by the end of 2025.
Until the CSRD Omnibus Proposals are approved by the EU and transposed into national law, CSRD as currently in force remains the law.
Scope of Application
If the CSRD Omnibus Proposals become law in the form proposed by the European Commission, the scope of application of CSRD would be significantly changed by taking EU companies / groups with less than 1,000 employees out of scope.
If the CSRD Omnibus Proposals become law, an EU company would generally only be in-scope for CSRD reporting if the company (including when consolidated with any subsidiaries) has more than 1,000 employees on average and either (i) turnover in excess of €50m or (ii) a balance sheet total (ie, total assets) in excess of €25m. If adopted, this change would effectively take Irish SPVs out of scope for CSRD reporting as SPVs would invariably have less than 1,000 employees.
Sustainability information in respect of SPVs may still need to be included in the consolidated report of an in-scope parent company, if the SPV has one. In that regard, under the CSRD Omnibus Proposals the 1,000-employee threshold does not apply to non-EU companies with a subsidiary or branch and significant turnover in the EU. These companies would still come into scope for reporting in respect of their 2028 financial year onwards.
Two-Year Delay
Under CSRD, as currently in force, some SPVs currently falling within scope are first due to report under CSRD in respect of their 2025 financial year and some other SPVs are first due to report for their 2026 financial year. Under the CSRD Omnibus Proposals and for SPVs that were due to report for their 2025 financial year, their CSRD reporting obligations would be delayed to their 2027 financial year - with the first report published in 2028. Under the CSRD Omnibus Proposals and for SPVs that were due to report for their 2026 financial year, their CSRD reporting obligations would be delayed to their 2028 financial year - with the first report published in 2029.
It is widely expected that the two-year delay will come into effect sooner than any other changes to CSRD (including the proposed amendments to the scope, outlined above). The two-year delay may become law by the end of 2025, meaning that SPVs would get the benefit of the delay. However, the timeline for other changes is more uncertain as those changes to CSRD (and certain other EU legislation, such as the Corporate Sustainability Due Diligence Directive which also forms part of the omnibus simplification package) are more controversial and are likely to be the subject of considerable debate as they progress through the EU legislative process.
EU Competitiveness
The obligations of CSRD are widely considered to be onerous, with preparations requiring considerable resources and time. In the context of SPVs specifically, the proposed amendment to the scope of application of CSRD and proposed two-year delay will be welcomed by stakeholders as an effective way of reducing the regulatory burden imposed by sustainability reporting and promoting the EU’s competitiveness.
Further Developments
We are continuing to keep a close eye on developments in this area. For further information on the application of CSRD to SPVs, please contact Turlough Galvin, Alan Keating, Christian Donagh or your usual contact in the Finance and Capital Markets Department.
This insight article is provided for general information purposes only and does not purport to cover every aspect of the themes and subject matter discussed, nor is it intended to provide, and does not constitute or comprise, legal or any other advice on any particular matter.