ESG Reporting 2026: New Obligations for Czech Companies

The CSRD (Corporate Sustainability Reporting Directive) from 2026 extends the sustainability reporting obligation to another group of companies in the Czech Republic.

From the 2025 accounting period (reported in 2026), ESG reports must be prepared by: - Large companies meeting 2 of 3 criteria: turnover over EUR 40 million, balance sheet over EUR 20 million, more than 250 employees - Listed small and medium enterprises - Subsidiaries of large groups

1. Environmental (E) - Greenhouse gas emissions (Scope 1, 2, 3) - Energy and water consumption - Biodiversity and ecosystems - Circular economy 2. Social (S) - Working conditions and remuneration - Equal opportunities and diversity - Health and safety at work - Supply chain 3. Governance (G) - Ethical management and compliance - Anti-corruption policies - Whistleblower protection - Cybersecurity

- Gender pay gap tracking – mandatory reporting of pay differences between men and women - Emission accounting – new accounting categories for carbon footprint - Employee training – recording ESG-related educational activities - Supplier due diligence – verifying ESG standards with partners

1. Conduct a gap analysis of current state vs. ESRS requirements 2. Designate a responsible person or team for ESG 3. Implement a data collection system 4. Engage an external auditor for report verification 5. Start communicating ESG strategy to stakeholders

Failure to submit an ESG report can lead to fines under the Accounting Act and there are also reputational risks when dealing with partners who require ESG compliance.