Sustainability report

We see a sustainable approach to business as a balance between environmental impact (planet), social equity (human resources), and economic value (profit), which together drive business development and growth. There is no one-size-fits-all solution for implementing sustainable processes for every business, as possible solutions can vary from building flood protection structures to changing communication strategies, restructuring business operations, etc. In close cooperation with our clients for already 22 years, we are used to looking for solutions and answers that are relevant and beneficial for a specific case.

The Sustainability information disclosure law, which adopts the requirements of the EU Corporate Sustainability Reporting Directive (CSRD) at the level of Latvia, defines that the subjects of the new legislation have to include a digital sustainability report in their annual report, and it has to be audited by the sworn auditor. 

The subjects of the Sustainability information disclosure law in the Republic of Latvia are:

• registered large companies and parent companies of large groups of companies;
• small companies, except for micro companies, and medium-sized companies whose securities are included in the regulated market;
• subsidiaries of third-country companies in certain circumstances;
• branches at certain criteria.

It should be noted that the range of legal entities that are subject to mandatory reporting will expand annually in the foreseeable future. For the first time, large companies and and parent companies of large groups of companies, which are public interest entities with more than 500 employees, who already prepare non-financial reports, are obliged to prepare a sustainability report for the 2024 reporting year. Then follow large companies that are obliged to prepare a sustainability report starting from the 2025 reporting year. According to the recent amendments to the Law on Annual Reports and Consolidated Annual Reports, the criteria for large companies (two of the three criteria must be exceeded) are:

• balance sheet - EUR 25 000 000
• net turnover - EUR 50 000 000 
• average number of employees in the reporting year - 250.

The law stipulates that the sustainability report must be prepared in accordance with the European Sustainability Reporting Standards (ESRS), which have been adopted and published in the EU Official Journal. The standards include environmental, social responsibility, and governance disclosure requirements.

The annual report, together with the included sustainability report, has to be submitted to the State Revenue Service's electronic declaration system (EDS) in the European Single electronic format (ESEF), i.e., in XHTML format, and sustainability information should be tagged according to the Inline XBRL (iXBRL) specification using the ESRS Set 1 XBRL Taxonomy. Read more about the digitalization of sustainability information in our expert's articles: ESRS iXBRL Taxonomy as the foundation for sustainability report structure.

Orients Audit & Finance, in cooperation with UK-based global software and services company CoreFiling, has created the first publicly available digital sustainability report template in Europe. To tag the report, the project of the International Sustainability Standards Board (ISSB) taxonomy was used. Check it out here. 

More information on the topic: 

• New IFRS sustainability standards already from 2024
• Why is the digital Inline XBRL format essential for structuring the IFRS annual and sustainability report?
• 7 tips for structuring your sustainability report 
• ESG data is new gold
• ESEF format for sustainability digital report. What does this mean for businesses?

Our team of professionals and niche experts knows how to assess ESRS double materiality, set sustainable targetss, develop customized strategies with action plans, and summarize them in the iXBRL sustainability report in compliance with ESRS. Contact us for more.