Sweden expands sustainability reporting requirements under amended Annual Reports Act

At a glance

• Sweden transposed the Corporate Sustainability Reporting Directive (CSRD) into national law, effective from 1 July 2024.
• As part of implementing the CSRD, certain employers are now required to engage with employee representatives regarding their sustainability reporting.

As part of Sweden’s implementation of the CSRD, the Swedish Annual Reports Act has been amended, extending the requirements to provide a sustainability report. This report must include information necessary to understand the company's impact on environmental issues, social conditions, employee matters, respect for human rights, anti-corruption and anti-bribery efforts, as well as corporate governance issues.

In terms of employment law, companies are now required to provide sustainability information to employee representatives and discuss relevant details and methods for obtaining and verifying this information. Additionally, companies must ensure that the views of employee representatives are communicated to management. Initially, this dialogue should occur with trade unions with which the company has a collective bargaining agreement (CBA). If the company is not bound by any CBA, discussions should be held with unions that represent employees within the company. The company will determine the appropriate level of dialogue.