FINLAND Law and Practice Contributed by: Kari Marttinen, Laura Leino, Outi Iso-Markku and Aino Lahti-Nuuttila, Erottaja Attorneys Ltd
16.3 Corporate Disclosure Requirement Pursuant to the Accounting Act (No 1336/1997) ( kir- janpitolaki ), large and public companies as well as public-interest entities have an obligation to include information on environmental impacts in their annual management report. Public-interest entities must also prepare an annual statement of non-financial informa- tion, which must include information on how the com- pany manages environmental matters. Please also see 16.4 Green Finance . Moreover, environmental permit-holders have an obli- gation to prepare regular reports for the supervisory authority. The details for reporting are included in the permit. Registered operators may have an obligation to prepare regular reports in accordance with the rel- evant governmental decree. 16.4 Green Finance Green finance-related regulation applicable in Fin- land mainly derives from EU legislation, comprising – inter alia ‒ the Taxonomy Regulation, the Sustain- able Finance Disclosure Regulation (SFDR), the Cor- porate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). Although the Taxonomy Regulation and the SFDR are directly applicable regulations in Finland, the CSRD was implemented into the national legislation. In Fin- land, national implementation of the CSRD primarily resulted in amendments to the Accounting Act, the Auditing Act (1141/2015) ( tilintarkastuslaki ) and the Limited Liability Companies Act. The sustainability reporting obligations of the CSRD became applicable on 1 January 2024, obliging companies subject to the CSRD to report in accordance with European Sustain- ability Reporting Standards (ESRS). The company’s external auditor must audit the report. The CSRD reporting compliance requirement is phased-in. The reporting obligations currently apply to large com- panies subject to the EU’s Non-Financial Reporting Directive (NFRD) and the first financial year covered is 2024 (the first year of reporting being 2025). In addition, the CSDDD entered into force on 25 July 2024, aiming to ensure that companies identify the adverse impacts of their business activities on human
rights and the environment and to mitigate such impacts. In April 2025, the European Parliament decided to postpone the implementation of sustainability report- ing and due diligence obligations under corporate responsibility legislation. The decision is part of the EU’s broader efforts to simplify legislation and strengthen competitiveness. According to the deci- sion, sustainability reporting in accordance with CSRD will be postponed by two years for companies that have not yet started reporting. Also, the implementa- tion of the CSDDD will be postponed by one year and the new deadline for member states to implement the directive is 26 July 2027. The first companies to be covered by the directive will be large companies (with more than 5,000 employees and a turnover of more than EUR1.5 billion), which will have to apply the rules from 2028 onwards. Environmental due diligence is an established part of due diligence in M&A, finance and property trans- actions. The need and scope of environmental due diligence are dependent on the target – ie, the antici- pated environmental risks associated with the target – and are, therefore, assessed on a case-by-case basis. Environmental due diligence is typically conducted in transactions involving the amendment or termination of business with potential impacts on the environ- ment or natural resources, such as transactions con- cerning industrial companies, mines, power plants or old industrial sites. Furthermore, environmental due diligence is typically conducted as part of a property transaction to determine the possible history of the site, contamination or other environmental damages related to the property in question, and the need and liability for environmental remediation. In recent years, there has been a constant rise in demand for environmental due diligence, resulting from growing awareness of the risk of high costs related to environmental liability and possible need for remediation. 17. Transactions 17.1 Environmental Due Diligence
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