AGEFI Luxembourg - juin 2025

AGEFI Luxembourg 14 Juin 2025 Conseil / RSE BySaraGARCIA–Associate,Arendt&Medernach & Rocco MEZZATESTA – Manager, Arendt Regulatory &Consulting T he implementation of Di- rective (EU) 2022/2464 on corporate sustainability reporting (CSRD) (1) into Luxem- bourg law has entered a de- cisive phase. Bill of law 8370 (the Bill), (2) intro- duced to implement the CSRD, has undergone sig- nificant amendment to align national imple- mentation with the EU Commission’s first Om- nibus Package (the Om- nibus Package). (3) In addition, the EU Commission is preparing a “quick fix” Delegated Regulation (4) that extends the transition period for selected European Sustainability Reporting Standards (ESRS) (5) datapoints and removes some disclosure requirements. These amendments provide vital clarifications for Wave 1 companies, (6) but also have indirect impli- cations for those in Wave 2, (7) Wave 3 (8) and Wave 4, (9) as well as potentially including several asset managers set up and/or operating inLuxembourg. The Omnibus Package may be seen as alleviating some compliance-related stress for certain entities by raising the employee threshold to more than 1,000, thus putting many Luxembourg-based asset managers out of CSRD scope, or by defer- ring their reporting by two years. However, this relief comes with significant impacts, which we explore in this article. Asset managers depend on investee companies’ CSRD disclosures tomeet their obligations under the Sustainable Finance Disclosure Regulation (SFDR) (10) and the EU Taxonomy Regulation. (11) It has been observed that, in the asset management sector specifically, delayed or missing sustain- ability data may lead to greater reliance on costly ESG data providers, reduced transparency and challenges in fulfilling mandatory disclosures under the SFDR. Although asset managers might not be required to report under the CSRD until 2028 for FY 2027, they should be aware that they may be part of another reporting entity’s value chain, the impacts of whichwill be discussed fur- ther in this article. What to expect and how to prepare The CSRD significantly expanded the scope of sustainability reporting obligations under the Non-Financial Reporting Directive (NFRD), (12) in- troduced mandatory ESRS and mandated assur- ance of sustainability information. The NFRD applies to large public-interest entities with over 500 employees and has required them to disclose non-financial information since 2018. The CSRD, published on 16 December 2022, sig- nificantly expanded this scope. Its original version applies to all large undertakings and listed SMEs (excluding micro-enterprises) with phased-in re- porting obligations: -Wave 1: NFRD entities report in 2025 for FY 2024 - Wave 2: other large undertakings report in 2026 for FY 2025 - Wave 3: listed SMEs report in 2027 for FY 2026, with an opt-out until 2028 -Wave 4: non-EU companies report in 2029 for FY 2028 To simplify implementation, the Stop-the-Clock Directive, (13) adopted as part of theOmnibus Pack- age and published in March 2025, grants a two- year deferral for companies reporting from FY 2025. This means that while actual reporting will begin in 2028, data requests fromWave 1 compa- niesmay start much earlier as asset managers face growing pressure to respond to ESGdata requests from investors, institutional clients, their value chain and regulators. This exacerbates the existing asymmetry where asset managers must disclose under the SFDRwithout equivalent data from in- vestee firms, which poses significant operational and reputational risk, as industry associations have already highlighted. Bill of law updates Bill of law8370, introduced on 29March 2024, pro- poses amendments to several key legislative in- struments. (14) Despite being introduced over a year ago, the Bill has not yet entered into force, mean- ing the CSRD is not currently (15) enforceable in Luxembourg. As a result, Wave 1 companies re- main subject to the existingNFRD framework and the legal basis for CSRD reporting obligations is still pending. To address the issue of legal uncer- tainty for the first reporting years, the Luxem- bourg government submitted amendments to the Bill on 6 May 2025. (16) These have been designed to align national implementation with the Stop- the-Clock Directive. According to the Bill’s newArticle 165 (introduced by Amendment 10), companies whose financial year began on or after 1 January 2024 and ended before the date that the Bill comes into effect are not required to prepare and publish sustainability information for that financial year under CSRD. Thus, the amendment expressly removes the obli- gation to issue a 2024 FY report. However, Amendment 11 (introducingArticle 166) confirms that the first CSRD reports will then be issued for FY 2025, provided that the Bill enters into force by the end of 2025. Additionally, the Luxembourg Conseil d’État (State Council) issued complementary notice on 3 June 2025 (17) endorsing the content of the proposed amendments, which paved the way for swift implementation from a legislative standpoint. “Quick fix” delegated regulation In parallel, the EU Commission is preparing a Delegated Regulation to facilitate the transition for Wave 1 companies. The draft was publishedon 22May 2025. While this regulationdoes not directly apply to com- panies reporting from FY 2027, it has indirect but immediate implica- tions for them, particu- larly with regard to data requests from clients. This “quick fix” is expected to: - extend transition periods for selected ESRS datapoints; and - remove the requirement to disclose anticipated financial effects of material sustainability impacts, risks and opportunities. The Delegated Regulation is composed of two ar- ticles: - Article 1, substituting Appendix C of Annex I of Delegated Regulation (EU) 2023/2772 implement- ing the ESRS (18) for the Annex contained in the “quick fix”; and -Article 2 for entry into force, which states that the Regulation applies to financial years beginning on or after 1 January 2025 and is fully binding and di- rectly applicable in all Member States that have implemented CSRD. Article 1 implementing the new Annex contains the new phase-in requirements, under which companies are allowed to defer disclosure of cer- tain complex environmental and social indicators until FY 2027. These include datapoints related to financial effects of sustainability risks, (19) and de- tailedworkforce-related disclosures. (20) Thismeans that companies forced to report fromFY 2025 will need to report on: - General Disclosures (ESRS 2) - Environmental Disclosures (Partial): ◦ ESRS E1 Climate Change ◦ ESRS E2 Pollution prevention and control mea- sures ◦ ESRS E3 Water consumption and discharge (ex- cept financial effects – deferred) ◦ ESRS E4 general biodiversity policies and actions (detailed disclosures deferred for companies <750 employees) ◦ ESRS E5 Resource efficiency andwaste manage- ment (excluding financial effects – deferred) - Social Disclosures (Partial): ◦ ESRS S1 Own Workforce ◦ ESRS S2–S4: Only applicable to companies with >750 employees; otherwise deferred. - Business Conduct Disclosures (Complete). Strategic considerations for asset managers Although asset managers may not face CSRD re- porting obligations until 2028 and many may fall outside its direct scope entirely due to the Om- nibus Package, a growing number of firms are opting to be proactive in evaluating their ESGdata collection processes, internal governance struc- tures and reporting systems. This reflects a wider market trend towards strengthening ESG infras- tructure in anticipation of client expectations and evolving regulatory scrutiny.At this stage, invest- ing in ESG data capabilities is seen not only as preparation for future regulatory requirements, but also as away tomeet increasing data demands fromclients and business partners already subject to CSRD. Early dialoguewith portfolio companies and service providers has also proven to be key for securing timely access to reliable ESG data. Some firms are also closely monitoring technical developments around digital tagging to stay ahead of implementation timelines. While the CSRD’s scopemay not formally extend to all asset managers, the framework is already having indirect impacts. For example, Wave 1 companies have already started requesting sus- tainability-related information from their coun- terparties to meet their own reporting requirements. Moreover, the industry continues to followdevelopments around the ESRS and the VSME standard, which many are considering a basis for voluntary reporting. As such, evenwith- out a legal obligation, ESG data aligned with CSRDmay increasingly become available and rel- evant for financial market participants. In this context, some asset managers are beginning to embed sustainability considerations into due dili- gence, risk assessment and investment decision- making processes. These efforts are viewed as enhancing internal ESG readiness, even in the ab- sence of regulatory certainty, while also improv- ing long-term investment performance and strengthening client confidence. However, the partial misalignment between the CSRD and SFDR continues to raise concern. For example, while the ESRS permits investee compa- nies to omit disclosures deemed non-material, the SFDRmandates that certain sustainability indica- tors be published regardless of materiality. This disconnect may lead to reporting inconsistencies or data gaps. Stakeholders across the financial sec- tor have therefore called for greater regulatory co- herence, including harmonised materiality assessment rules and clearer guidance on the in- teraction between the CSRD and SFDR. (21) Given the global nature of investment portfolios, further clarification is also needed on how to address data availability outside the EU and bridge interna- tional ESG reporting expectations. As global in- vestors, asset managers cannot afford to remain passive amid the rapid international evolution of sustainability standards. The creation of the Inter- national Sustainability Standards Board (ISSB) and its global baseline for sustainability disclo- sures is reshaping expectations beyond the EU. CSRD in Luxembourg: what asset managers should know 1) Directive (EU) 2022/2464 of the European Parliament and of theCouncilof14December2022amendingRegulation(EU)No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Di- rective2013/34/EU,asregardscorporatesustainabilityreporting 2)Availableat :https://www.chd.lu/fr/dossier/8370( Frenchonly) 3)DIRECTIVEOFTHEEUROPEANPARLIAMENTANDOF THECOUNCILamendingDirectives(EU)2022/2464and(EU) 2024/1760 as regards the dates fromwhich Member States are toapplycertaincorporatesustainabilityreportingandduedili- gencerequirements,andREGULATIONOFTHEEUROPEAN PARLIAMENTANDOFTHECOUNCIL amending Regulations (EU) 2015/1017, (EU) 2021/523, (EU) 2021/695and(EU)2021/1153asregardsincreasingtheefficiency of the EU guarantee under Regulation (EU) 2021/523 and sim- plifyingreportingrequirements 4)CommissionDelegatedRegulation(EU)amendingDelegated Regulation (EU) 2023/2772 as regards the postponement of the application date for the disclosure requirements of certain un- dertakings 5)CommissionDelegatedRegulation(EU)2023/2772of31July 2023supplementingDirective2013/34/EUoftheEuropeanPar- liament and of the Council as regards sustainability reporting standards 6)Companiesexpectedtoreportforthefinancialyear(FY)2024 underCSRD 7)Companiesexpectedtoreportforthefinancialyear(FY)2025 underCSRD 8)Companiesexpectedtoreportforthefinancialyear(FY)2026 underCSRD 9)Companiesexpectedtoreportforthefinancialyear(FY)2027 underCSRD 10) Regulation (EU) 2019/2088 of the European Parliament and oftheCouncilof27November2019onsustainability-relateddis- closuresinthefinancialservicessector 11)Regulation(EU)2020/852oftheEuropeanParliamentandof theCouncilof18June2020ontheestablishmentofaframework to facilitate sustainable investment, and amending Regulation (EU)2019/2088 12)Directive2014/95/EUoftheEuropeanParliamentandofthe Council of 22 October 2014 amending Directive 2013/34/EU as regardsdisclosureofnon-financialanddiversityinformationby certainlargeundertakingsandgroups 13) Directive (EU) 2025/794 of the European Parliament and of theCouncilof14April2025amendingDirectives(EU)2022/2464 and (EU) 2024/1760 as regards the dates fromwhich Member Statesaretoapplycertaincorporatesustainabilityreportingand duediligencerequirements 14) The Lawof 10August 1915 on commercial companies, The Lawof 19 December 2002 on the trade and companies register and annual accounts, The Law of 5April 1993 on the financial sector,TheLawof11January2008ontransparencyobligations ofissuers,TheLawof23July2016ontheauditprofession 15)Thisarticleisupdatedasat10June2025 16) “06.05.2025 Amendments gouvernamentaux”, available at https://www.chd.lu/en/dossier/8370 17)03.06.2025DeuxièmeaviscomplémentaireduConseild’État https://www.chd.lu/en/dossier/8370 18)CommissionDelegatedRegulation(EU)2023/2772of31July 2023supplementingDirective2013/34/EUoftheEuropeanPar- liament and of the Council as regards sustainability reporting standards 19)ESRS2SBM-3para.48(e),ESRSE1-9,ESRSE3-5,ESRSE4-6 andESRSE5-6 20)ESRSS1,ESRSS2,ESRSS3andESRSS4 21)EFAMA,‘EuropeanCommission’sOmnibusSimplification Package’,7May202 5https://lc.cx/pwSegz L e ministre des Finances, Gilles Roth, s'est rendu à Paris le 5 juin pour mar- quer le lancement du label « Fi- nance Europe » aux côtés de la France, de l'Espagne, de l'Alle- magne, des Pays-Bas et de l'Es- tonie, sous l'impulsion du ministre français, Éric Lom- bard. L'évènement s'est tenu en présence de hauts représentants européens du secteur financier, notamment des banques, des assureurs et de grandes associa- tions professionnelles. Unir nos forces pour l'avenir de l'Europe Lors de l'évènement, le ministre a participé à une table ronde consacrée au thème «Réorienter l'épargne pour financer la croissance et l'innovation en Europe ». Le ministre a souligné : « D'aucuns y verront un petit pas, mais le lance- ment du label aujourd'hui envoie un signal fort pour l'Europe. Nous devons tirer parti de cette dynamique positive et de l'intérêt renouvelé pour investir dans les actifs européens afin de poser les bases d'une Europe plus compétitive. » Le Laboratoire de la compétitivité L'évènement a eu lieu dans le cadre de la deuxième réunion du Laboratoire de la compétitivité, une initiative lancée par leministre espa- gnol, Carlos Cuerpo, visant à per- mettre à des groupes d'États mem- bres de tester, sur une base volon- taire, des projets visant à approfon- dir les marchés de capitaux euro- péens et ainsi accroître la compétiti- vité en Europe. La troisième réunion du Laboratoire de la compétitivité se tiendra à l'au- tomne 2025 au Luxembourg. Source : ministère des Finances Lancement du label Finance Europe ©MFIN (de g. à dr.) JasperWesseling (Pays-Bas) ; Carlos Cuerpo (Espagne) ; Eric Lombard (France) ; Gilles Roth (Luxembourg) ; Jeannette Schwamberger (Allemagne) ; MärtenRoss(Estonie); Luis Barroso (Portugal)