The government has approved a sustainability reports standard (ESRS) that will become mandatory for major companies from 2024. Entrepreneurs have been critical of the additional reporting obligation pursuant to a European Commission regulation.
The Ministry of Finance said that the sustainability reporting obligation will be introduced in 2024 and gradually expanded to become an integral part of annual reports in which major companies and groups gauge effects and sustainability aspects of their activities.
Rainer Osanik, head of the ministry's financial information policy department, said that while it will add to administrative burden, the sustainability report is necessary, also in supporting the European Green Deal.
The ministry said that an online tool to help companies understand sustainability topics and facilitate data collection is planned to be launched in late 2025. Several ESRS standards trainings will be held in the coming years.
Starting from 2024, the reporting obligation will apply to major organizations that are subject to public interest and have over 500 employees, while starting from 2025, it will apply to all major businesses who meet two of the following criteria in two consecutive years (250 employees or more, €40 million in sales revenue, balance of €20 million). The directive will apply to all other listed companies from 2026, also small and uncomplicated credit institutions and captive insurance companies.
This means that sustainability reporting will become mandatory for around 350 Estonian companies. Enterprises have previously criticized the new obligation, saying it adds €100,000 worth of unnecessary red tape annually.
Editor: Marcus Turovski