Temporary Exemption from Mandatory ESG Reporting for 2025–2026

With effect from 1 June 2026, a new Article 39zg was added to the Act, enabling the so-called “stop-the-clock” mechanism. The exemption applies to annual reports filed after 31 May 2026 for financial periods beginning from 1 January 2025 to 31 December 2026.

Who Can Apply the Exemption

The temporary exemption may be applied by individual accounting entities and consolidated groups that would otherwise be required to report sustainability information in their annual reports under the Act on Accounting, provided that:

• net turnover does not exceed EUR 450 million, or
• the average recalculated number of employees does not exceed 1,000.

For consolidated groups, these thresholds are assessed at the level of the group as a whole.

The exemption therefore does not apply only to a historically defined group of undertakings, but to all accounting entities and groups that would otherwise fall within the scope of ESG reporting, provided they meet the specified size-related and time-related conditions.

Practical Impact

Where the conditions for applying the exemption are met:

• the annual report does not have to include ESG information,
• there is no obligation to obtain assurance on such information, and
• the auditor does not express an opinion on ESG information, as it is not required by law.

The amendment has been published in the Collection of Laws.