Works council now also deals with sustainability reporting

In recent years, Europe has imposed a number of obligations on companies regarding the recording and publication of information about their impact on people and the environment. The Belgian legislator now foresees a role for the works council in the context of the Corporate Sustainability Reporting Directive (CSRD). The works council is granted the authority to take note of the sustainability information, to discuss it, and, if necessary, to issue an opinion on it.

Corporate Sustainability Reporting Directive

With the Act of 2 December 2024, the legislator transposed the European Corporate Sustainability Reporting Directive (CSRD) into national law. This directive requires companies to disclose information about their impact on people and the environment.

Specifically, it introduces a wide range of reporting obligations, which also have implications for collective consultation within companies. Companies falling within the scope of the CSRD are required to communicate and discuss the collected sustainability information with the works council.

Scope and content of the reporting

The obligation to collect and disclose sustainability information — including to the works council — applies to all publicly listed companies and large enterprises that, for at least two consecutive financial years, exceed two of the following three thresholds:

• €25 million in total assets
• €50 million in net turnover
• An average of 250 employees

For large publicly listed companies, this obligation has been in effect since January of this year. Other large companies are required to start reporting as of January 2026, covering their 2025 financial year. SMEs must begin reporting as of January 2027, covering the 2026 financial year.

The sustainability report must include information on the company's impact on people and the environment, as well as the impact of people and the environment on the company. This is not limited to the company’s own operations: the impact of the entire value chain, from suppliers to end-users, must be addressed. This information must be included in the company’s annual management report.

Reporting of sustainability information to the works council

In light of this mandatory sustainability reporting, the works council has been assigned a role as well. From now on, the works council is authorised to take note of the sustainability information annually, discuss it and, if necessary, issue an opinion on it.

To this end, the company must communicate the sustainability information, along with details on how it was obtained, to the works council, in accordance with the following timeline:

• The works council must receive the information within three months after the end of the financial year and at least 15 days prior to the meeting at which it will be discussed.
• The discussion should take place before the general meeting at which shareholders approve the annual accounts. During the general meeting, a report of the works council discussion is presented to the shareholders.

If there is no works council within the company, that task is taken up by the Committee for Prevention and Well-being at Work (CPBW). In the absence of CPBW, the trade union delegation takes on the responsibility.

Takeaway

Companies that fall within the scope of the CSRD are required to involve their works council in the sustainability reporting process. The works council has the authority to take note of the information, to discuss it, and, if necessary, to issue an opinion on it.

Source: Wet van 2 december 2024 betreffende de openbaarmaking van duurzaamheidsinformatie door bepaalde vennootschappen en groepen en de assurance van duurzaamheidsinformatie en houdende diverse bepalingen, BS 20 december 2024.