Questions & Answers
Companies that become ‘large undertakings’ for the first time: do they benefit from the Phase-In Requirements?
- Phase-in requirements
- first-time large undertaking
Background
The only question by the submitter marked as ‘1: explanation’ is answered here. The submitter also had a second question: ‘Are the ESRS requirements applicable from the year they exceed the thresholds?’ which is not in scope of the Q&A platform and was forwarded to the European Commission.
ESRS 1 section 10.4 paragraph 137 states: ‘Appendix C List of phased-in Disclosure Requirements in this Standard sets phase-in provisions for the Disclosure Requirements or datapoints of Disclosure Requirements in ESRS that may be omitted or that are not applicable in the first year(s) of preparation of the sustainability statement under the ESRS.’
In setting phase-ins, ESRS 1 Appendix C uses the wording ‘. . . for the first year (for the first two years/for the first three years) of preparation of its sustainability statement . . .’
Answer
As stated in ESRS 1 Appendix C, the phase-in requirements apply to the first year, to the first two years or to the first three years ‘of preparation of its sustainability report’. All undertakings meeting the criteria of the Accounting Directive (Directive 2013/34/EU) Article 3 of large undertakings (groups) may benefit from the phase-in requirements listed in ESRS 1 Appendix C, including undertakings that become ‘large undertakings’ for the first time.