Postponement of the requirement for companies to include sustainability information into the governance report
Today, the Seimas, approved the draft Law on Reporting of Companies and Group of Companies and the draft Law on Securities prepared by the Ministry of Finance which postpone for 2 years the requirement for certain companies to include sustainability information in their governance reports. Other amendments proposed by the Ministry were also approved.
The legislative amendments transpose the Stop-the-clock directive, adopted on 16 April 2025, which postpones the deadlines set out in the directive as regards corporate sustainability reporting for the inclusion of sustainability information in the governance reports.
It is envisaged that large companies with more than 250 employees (public and private limited liability companies, state owned and municipal companies, parent companies of large groups of companies, collective or limited partnerships, whose all full members are public and private limited liability companies) should include sustainability information into their governance reports not for 2025, as is currently the case, but for 2027.
Medium-sized and small listed companies should be required to include this information into their governance reports for the first time, not for 2026, but for 2028, accordingly.
It is estimated that more than 200 companies will be affected by these changes.
The Stop-the-clock directive forms part of the Omnibus I package which came into force in February 2025. Omnibus I aims to significantly reduce the administrative burden on EU companies in order to increase their competitiveness at international level by focusing on sustainable growth in the EU economy.
The requirement to include sustainability information into governance reports remains applicable to large companies listed in the stock exchange, banks and insurance undertakings with more than 500 employees. These companies have already included sustainability information into their governance reports for 2024. There are about 20 such companies in Lithuania.
At the same time, the amendments to the Law on Reporting of Companies and Group of Companies fully transpose the directive introducing the requirement for corporate income tax information reports prepared by third-country parent companies to be published on the subsidiary’s website for at least 5 consecutive years and submitted to the data processor of the Register of Legal Entities.
In order to reduce the administrative burden on business, it is also provided that the parent company of a medium-sized group of companies which does not include public-interest entities is not required to prepare consolidated financial statements and a consolidated governance report. There are currently about 80 such medium-sized groups of companies in Lithuania.
In addition, the Law on Reporting of Companies and Group of Companies was supplemented with provisions allowing for more flexibility in the use of the possibilities not to draw up consolidated financial statements and consolidated governance reports when they are drawn up by the ultimate parent company of a group of companies.