Who Must File an ESG Report (Sustainability Report) and When?
ESG reports have been widely discussed for some time, and sustainability reporting is a subject that affects many entrepreneurs. Polish entrepreneurs are waiting for the implementation of the EU directives relating to a new reporting obligation: reporting on sustainability matters, that is ESG reports (in Polish). At the end of August 2024, an updated version of the draft amendment to the Accounting Act appeared on the website of the Government Legislation Centre (https://legislacja.rcl.gov.pl/projekt/12381804/katalog/13035996#13035996). It introduces into the Polish legal system the EU rules on sustainability reporting by enterprises arising from the so-called CSRD Directive. The draft act resolved doubts about which entities the CSRD Directive covers, answering the question "who is subject to the obligation to prepare sustainability reports?".
| Report for 2024 | Report for 2025 | Report for 2026 |
|---|---|---|
500 persons employed PLN 110 million in assets or PLN 220 million in net revenue |
> 250 persons employed > PLN 110 million in assets > PLN 220 million in net revenue |
50-250 persons employed 33-110 million in assets PLN 66-220 million in net revenue |
| an entity referred to in Article 2(1)(3) of the Accounting Act[1], an alternative investment company (ASI), an issuer of securities, a national payment institution, an electronic money institution | no additional requirements | the entity is an issuer on a stock exchange |
The table above is a simplification and summary of the rules on the sustainability reporting obligation, based on the provisions of the amendment to the Accounting Act. The requirements are set out in more detail later in this article.
Who is subject to the sustainability reporting obligation? What, in practice, is a large entity and a small or medium-sized entity? When does the ESG reporting obligation take effect? By what date should my company prepare a sustainability report?
In this article we discuss the range of entities that will in practice be covered by the ESG reporting obligation (sustainability reporting). The group of entities required to report will become wider year by year. A number of entities listed in the draft amendment may also use the option of simplified sustainability reporting. Our law firm specialises in preparing ESG reports.
To determine which entities are subject to the reporting obligation, the Accounting Act introduces size criteria and a criterion based on the legal form of entities, and over the years 2023-2027 the reporting obligation will gradually cover more and more "smaller" entities. When the planned act enters into force, the sustainability reporting obligation will be extended from around 150 entities to around 4,500 entities. This matter was the subject of comments submitted on the draft act and of explanations given by the Minister of Finance on 4 September 2024.
The draft amendment to the Accounting Act introduces an extended scope of entities required to report sustainability information. According to the explanatory memorandum to the draft amendment, the ESG reporting obligation will cover:
- large entities,
- parent entities of a large capital group,
- small and medium-sized entities admitted to trading on a regulated market (excluding listed micro-enterprises), and
- subsidiaries and branches with their registered office in an EU Member State that meet specified conditions and size criteria, whose ultimate parent entity or standalone entity, respectively, is subject to the law of a third country.
Legal Form of the Entity
According to the draft act, the provisions on sustainability reporting apply to entities that are:
- a capital company (limited liability company (sp. z o.o.), joint-stock company, simple joint-stock company);
- a limited joint-stock partnership;
- a general or limited partnership all of whose partners with unlimited liability are capital companies, limited joint-stock partnerships or companies from other countries with a legal form similar to these companies;
- insurance undertakings and reinsurance undertakings;
- a domestic bank, a branch of a credit institution or a branch of a foreign bank within the meaning of, respectively, Article 4(1)(1), (18) and (20) of the Banking Law Act of 29 August 1997.
In this article we focus on the reporting requirements for large entities and for medium-sized and small entities that are issuers of securities admitted to trading on one of the regulated markets of the European Economic Area and operate as companies.
See also: Family foundation (in Polish)
Size Criterion
The Act narrows the list of entities covered by the ESG reporting obligation by introducing further requirements that the types of entity listed above must meet. The obligation to prepare non-financial sustainability reports covers:
- small entities and medium-sized entities (this applies only to entities that are issuers of securities admitted to trading on one of the regulated markets of the European Economic Area), and
- large entities (regardless of whether they are issuers of securities).
While the first criterion (the type of entity, based on its legal form) raises no doubts, the size criterion introduced in the CSRD Directive and then specified in the draft amendment to the Accounting Act creates difficulties of interpretation. This subject deserves discussion because entrepreneurs must determine, on the basis of the two criteria above, whether their company will be covered by the ESG reporting obligation.
See also: Legal services for businesses
For What Period Is the Size Criterion Assessed?
Whether an entity meets the size criteria is assessed for two years, that is: i) the financial year for which it prepares financial statements and ii) the year preceding that financial year. For an entity commencing activity (or commencing the keeping of accounting records in the manner specified in the Act), it is assessed for the financial year in which it commenced activity (or the keeping of accounting records in the manner specified in the Act).
Small / Medium-Sized / Large Entity: The Size Criterion
A small entity is one that has not exceeded at least two of the following three amounts:
- PLN 33,000,000: total balance sheet assets at the end of the financial year,
- PLN 66,000,000: net revenue from sales of goods and products for the financial year,
- 50 persons: average annual employment in full-time equivalents.
* From 2026, the ESG reporting obligation will cover only small entities that are issuers of securities admitted to trading on one of the regulated markets of the European Economic Area.
See also: Legal services for companies
A medium-sized entity is one that has not exceeded at least two of the following three amounts:
- PLN 110,000,000: total balance sheet assets at the end of the financial year,
- PLN 220,000,000: net revenue from sales of goods and products for the financial year,
- 250 persons: average annual employment in full-time equivalents.
* From 2026, the ESG reporting obligation will cover only medium-sized entities that are issuers of securities admitted to trading on one of the regulated markets of the European Economic Area.
A large entity is one that has exceeded at least two of the following three amounts:
- PLN 110,000,000: total balance sheet assets at the end of the financial year,
- PLN 220,000,000: net revenue from sales of goods and products for the financial year,
- 250 persons: average annual employment in full-time equivalents.
* From 2025, the ESG reporting obligation will cover all large entities, regardless of whether they have the status of an issuer on a stock exchange.
Loss of Small / Medium-Sized / Large Entity Status
An entity loses the status of a small or medium-sized entity, respectively, if for 2 consecutive years (in the financial year for which it prepares financial statements and in the year preceding that financial year) it has exceeded at least two of the three amounts above. An entity loses the status of a large entity if for 2 consecutive years (in the financial year for which it prepares financial statements and in the year preceding that financial year) it has not exceeded at least two of the three amounts above.
See also: Commercial mediation
In Which Year Will the Reporting Obligation Apply to My Company?
| ESG report for the financial year: | Report for financial year 2024 | Report for financial year 2025 | Report for financial year 2026 |
|---|---|---|---|
| Deadline for preparation, by: | 30 March 2025 | 30 March 2026 | 30 March 2027 |
| Deadline for filing with the KRS, by: | 15 July 2025 | 15 July 2026 | 15 July 2027 |
| Legal form of the business: |
|
||
| Type of entity: | an entity referred to in Article 3(1e)(1)-(6) of the Accounting Act[3] (in essence, this means: an entity referred to in Article 2(1)(3) of the Accounting Act[4], ASI, issuers of securities, national payment institutions, electronic money institutions) | regardless of the type of entity, regardless of whether the entity is an issuer on a stock exchange | the entity is an issuer of securities admitted to trading on one of the regulated markets of the European Economic Area |
| Size criteria: |
The entity meets both of the criteria below: 1) 500 persons of average annual employment in full-time equivalents, and 2) PLN 110,000,000 of total balance sheet assets at the end of the financial year or PLN 220,000,000 of net revenue from sales of goods and products for the financial year. |
Large entity (has exceeded at least 2 of the 3 amounts below): 1) 250 persons of average annual employment in full-time equivalents, 2) PLN 110,000,000 of total balance sheet assets at the end of the financial year, 3) PLN 220,000,000 of net revenue from sales of goods and products for the financial year. |
Medium-sized entity (has not exceeded at least 2 of the 3 amounts below, that is, has exceeded at most 1 amount): 1) 250 persons of average annual employment in full-time equivalents, 2) PLN 110,000,000 of total balance sheet assets at the end of the financial year, 3) PLN 220,000,000 of net revenue from sales of goods and products for the financial year. and Small entity (has not exceeded at least 2 of the 3 amounts below, that is, has exceeded at most 1 amount): 1) 50 persons of average annual employment in full-time equivalents, 2) PLN 33,000,000 of total balance sheet assets at the end of the financial year, 3) PLN 66,000,000 of net revenue from sales of goods and products for the financial year. |
The table above is a simplification and summary of the rules on the sustainability reporting obligation, based on the provisions of the amendment to the Accounting Act (Article 1, Article 11(5), Article 63q(1), Article 63r(1))[2].
Deadline for Preparing the ESG Report
Under the proposed Article 63r(1) of the amendment to the Accounting Act, entities are required to present a sustainability report in a separate part of the management report. The ESG report is therefore part of the company's annual management report.
The management report containing the sustainability report is prepared together with the financial statements, as follows from Article 49(1) of the Accounting Act and Article 63r(1) of the amendment.
See also: Business law (in Polish)
As a rule, an entity therefore prepares the financial statements, the management report and the sustainability report by 30 March of the following year (within 3 months of the balance sheet date, which usually falls on 31 December). The head of the entity files these reports with the registry court within 15 days of the approval of the annual financial statements. The financial statements are, as a rule, approved by 30 June of the following year (within 6 months of the balance sheet date). This means that, as a rule, the financial statements, the management report and the sustainability report are filed with the KRS by 15 July of the following year. This follows from Article 49(1), Article 52(1) and Article 53(1) of the Accounting Act. If the financial statements have not been approved within that period, the management report is published on the entity's website within 15 days after that period, and also 15 days after their approval.
Sources:
[1] organisational units operating under the Banking Law, the provisions on trading in securities, the provisions on crowdfunding services for business ventures, the provisions on investment funds and the management of alternative investment funds, the provisions on insurance and reinsurance activity, the provisions on cooperative savings and credit unions or the provisions on the organisation and operation of pension funds, regardless of the amount of revenue
[2] Article 1, Article 11(5), Article 63q(1), Article 63r(1)
[3] Accounting Act of 29 September 1994 (consolidated text: Journal of Laws of 2023, item 120, as amended).
[4] organisational units operating under the Banking Law, the provisions on trading in securities, the provisions on crowdfunding services for business ventures, the provisions on investment funds and the management of alternative investment funds, the provisions on insurance and reinsurance activity, the provisions on cooperative savings and credit unions or the provisions on the organisation and operation of pension funds, regardless of the amount of revenue.
