The forthcoming amendment to the Czech Accounting Act, scheduled to take effect on 1 January 2027, implements the European Directive (EU) 2026/470 (the so-called Omnibus I package) and marks a significant shift in non-financial reporting requirements. The originally ambitious scope of the EU's Corporate Sustainability Reporting Directive (CSRD), which was expected to affect hundreds of medium-sized and large Czech companies, has been substantially narrowed. For the vast majority of Czech businesses, this means the end of mandatory sustainability reporting as a significant administrative burden.
The key change is the replacement of the existing "large undertaking" criterion with entirely new and significantly higher size thresholds. Companies will only be required to prepare a sustainability report if they simultaneously exceed both of the following thresholds: an annual net turnover of CZK 10,910,250,000 (equivalent to EUR 450 million) and an average of 1,000 employees. The same thresholds will also apply on a consolidated basis to corporate groups. Companies that previously fell within the scope based on the former threshold of 250 employees will no longer be subject to the statutory reporting obligation.
The amendment also introduces relief in the area of assurance. Sustainability reports will be subject only to limited assurance. The proposal completely removes the previously envisaged automatic transition to the more demanding reasonable assurance requirement, enabling companies to reduce long-term audit costs. At the same time, reporting requirements relating to supply chains (Scope 3) are being simplified. The legislation introduces the status of so-called "protected entities", allowing large corporations to use reasonable estimates where reliable ESG data from smaller suppliers cannot be obtained objectively.
However, these changes do not mean that ESG will cease to be relevant for smaller companies. Businesses outside the mandatory reporting scope will continue to face requests for ESG information from financing banks and multinational customers. For this purpose, the voluntary European VSME (Voluntary SME Standard) is becoming increasingly important, providing a consistent and administratively proportionate framework for voluntary sustainability reporting.
