The EU Corporate Sustainability Reporting Directive (CSRD) is transposed into Italian national law via Legislative Decree No. 125 of 6 September 2024. The decree replaces Legislative Decree No. 254 of December 30, 2016, which transposed Directive 2014/95/EU concerning non-financial reporting. It introduces new thresholds for the definition of listed SMEs and changes to the sanctions regime on auditing activities. Listed SMEs are companies that fall within at least two of the following ranges:

• balance sheet total greater than € 450,000 and less than € 25 million

• net revenues from sales and services of more than € 900,000 and less than € 50 million;

• average number of employees employed during the financial year not less than 11 and not more than 250.

Changes to the sanction regimes’ key elements include applicability of the decree to only listed companies, specific liability for directors of companies subject to reporting obligations, and transitional provisions on monetary sanctions.

The timeline of the main stages of the CSRD are as follows:

• Large companies and parent organisations of large groups with more than 500 employees that are public interest entities, reporting year starting from the 1^st of January 2024;

• large enterprises and parent organisations of large groups that fall under at least two of these three parameters: number of employees over 250, turnover of € 50 million, balance sheet total of € 25 million, starting from the 1^st of January 2025;

• and listed small and medium-sized companies, smaller credit institutions, and insurance and reinsurance companies, starting from the 1^st of January 2026.

Italy has not transposed the Stop-the-clock Directive, but an amendment is expected from the Italian Government, since CONSOB, the Italian financial markets regulator and the supervision authority for the CSRD, has updated its Issuers’ Regulation with a smaller scope of its own supervisory roles and certain reporting requirements.

As the transposition deadline for the EU Corporate Sustainability Due Diligence Directive (CSDDD) originally was July 2026, Italy has not transposed the Directive into its national laws yet. The country is now awaiting the Omnibus Package developments.

Italy has adopted a new law to transpose the EU Whistleblower Protection Directive on whistleblowing, effective from 15 July 2023. The decree imposes the adoption of whistleblowing procedures for all employers staffed with an average of at least 250 employees in the last year and on December 17, 2023 for companies employing in the last year an average up to 249 employees. Granted by the Decree, the following persons may utilise the legal protection:

• Whistle-blowers, such as candidates to employment, employees, former employees, trainees, shareholders, members of corporate bodies, consultants and professionals, employees or consultants of contractors;

• facilitators, the persons who have supported and helped the whistle-blower;

• individuals who operate in the same work context and have family, affective or continuous contacts with the whistle-blower; and

• legal entities owned by the whistle-blower or for which the whistle-blower works, such as a contractor, or related to the whistle-blower.

The law was criticised for reducing the level of protection already offered in Italian law. A report from Transparency International has argued that the Italian law falls below the EU standard as follows:

• It has a limited and fragmented material scope, as the scope of what can be reported is comprehensive for the public sector, but the scope for the private sector is limited to reporting breaches of EU law in the areas of the directive.

• It has a restrictive personal scope, in the following sense: an individual who wants to report a breach involving a private company that does not have a legal obligation to establish an internal whistleblower system (i.e. a company with less than 50 employees) is not considered a whistleblower and cannot report externally.

• There are conditions for reporting externally which do not comply with the Directive. Whistleblowers can report directly to the competent authorities only if certain conditions are fulfilled.

The Legislative Decree 104/2022 on the EU Directive on Transparent and Predictable Working Conditions entered into force on 13 August 2022. It amended the provisions of Legislative Decree No. 152 of 26 May 1997 on the information that the employer must provide to the worker. It provides the following: 

• Specific and mandatory complete information to be given by the employer to the employee, such as the identity of the parties, the place of work, the type of the employment relationship, the length of the probationary period, the duration of vacation leave or of other paid leave, the schedule of normal working hours, the procedure/form/terms of notice in the event of termination, the applicable collective bargaining agreement and company contract;

• the information to be given prior to the commencement of employment, in written or digital format, shall be accessible to employees at any time during employment;

• and in case of failure to provide information or if the information provided is late or incomplete, an administrative fine from € 250 to € 1,500 shall be imposed for each worker concerned.

Italy has not started the transposition process of the EU Directive on Adequate Minimum Wages. Italy does not have a minimum wage prescribed by law. Minimum wages are set by collective agreements at the sectoral level, which covers the majority of employees. For the transposition of the EU Directive on Adequate Minimum Wages, Italy has taken minimal steps with the argument that the system is already aligned with the Directive’s aims and no further action is needed. Italy is above the collective bargaining coverage of the Directive; however, it is argued that inflation has eroded wages and statistical data on bargaining coverage is not always reliable, as well as too many workers are at risk of poverty, affected by short-term part-time and fixed-term contracts. Although civil society groups support adopting a statutory minimum wage of € 9 per hour, the current right-wing government claims that it is not necessary.

Italy has transposed the EU Posted Workers Directive through Legislative Decree No. 136/2016 on 22 July 2016. The law requires posted workers receive wages aligned with Italian workers of the same category based on the most representative collective agreement; employment conditions to be extended to posted workers if they are more favourable than those of the sending country; a full posting declaration with necessary information, such as start and end date of the posting, type of activity; and to appoint a representative that is domiciled in Italian territory to liaise the posting company and the Labour Inspectorate officers.

Regarding posted workers in the construction sector, workers need to be registered and pay contributions to the competent Construction Fund (Cassa Edile), and their working conditions have to be adapted to the relative national collective agreement, unless posted workers are from countries that have entered a Convention with Italy on this issue, such as Germany, France, Austria, and San Marino.

The Ministry of the Environment and Energy Security in Italy is responsible for transposing the EU Energy Performance of Buildings Directive (EPBD), with the technical support of the National Agency for Energy Efficiency (ENEA). Decree 192/2005 laid the groundwork for implementing the EPBD in Italy. Later, various legal measures updated the minimum energy performance standards for buildings. Law 90/2013 transposed Directive 2010/31/EU into Italian law, significantly revising the original 2005 framework.

This process was finalised in June 2015 with three inter-ministerial decrees (dated 26 June 2015), which define and regulate the minimum energy performance, drawn up during the building's design phase, and the energy performance certification, drawn up upon the building's completion phase; and introduced more stringent performance standards for new constructions and major renovations with the following:

• Application of calculation methodologies for energy performance and definition of buildings' minimum requirements, defining the requirements of Nearly Zero-Energy Buildings (NZEBs);

• Incorporation of renewable energy sources (RES) in building regulations,

• An update of the national guidelines for Energy Performance Certificates (EPCs).

These three decrees from June 2015 remain in effect until the implementation of Directive 2024/1275. They apply to existing and new non-residential and residential buildings.

Italy plans to cut building-related emissions by just 31% by 2030, postponing the majority—69%—of the reductions to the period between 2030 and 2050. However, it is argued that the current pace of progress is insufficient to meet these goals. According to ENEA, 57% of the total building stock fell into classes F and G in Italy, meaning that over half of Italian buildings should undergo energy efficiency upgrading and/or renovation by 2030. The transposition of the EPBD is still ongoing, and for this purpose, a group has been created and coordinated by ENEA.

In line with the EPBD, Italy submitted a draft NBRP to the European Commission in June 2023 and presented the document to the national stakeholders for consultation. A final plan has not yet been submitted.

The EED is not yet transposed into Italian law, and ENEA is coordinating the preparation for its implementation.

Italy has transposed the EU Waste Framework Directive into national law (L. n. 116/2020), which was published in the Gazzetta Ufficiale della Repubblica Italiana on 11 September 2020, more than 2 months after the deadline of 5 July 2020. It introduces the Extended Producer Responsibility (EPR) principle for producers to consider organisational and financial responsibility of their waste and reuse, recycling and land disposal targets for municipal solid waste.

In 2022 Italy has adopted the National Strategy for the Circular Economy and the National Waste Management Plan. The National Waste Management Plan sets out the medium- and long-term goals, guidelines, and strategic criteria for shaping regional waste management plans ("Piani Regionali di Gestione dei Rifiuti"). Its purpose is to align waste management policies with EU Directives and ensure consistency across all levels of government. The plan focuses on addressing infrastructure and planning deficiencies in various regions, promoting sustainable, efficient, and cost-effective waste management practices. It emphasises self-sufficiency and proximity principles while aiming to meet targets for waste prevention, reuse, recycling, and recovery, as well as ensuring proper waste traceability.

In relation to the construction sector, the National Strategy for the Circular Economy introduces measures to promote the recovery and recycling of construction and demolition waste and the use of circular materials. Article 11 of the Waste Framework Directive,  implemented in Article 181 of Legislative Decree 152/2006, sets out targets for the recovery of construction and demolition waste of 70%.

Italy's basis for energy efficiency is Law No. 10/1991 - "Regulations for the Implementation of the National Energy Plan with Regard to the Rational Use of Energy, Energy Savings and the Development of Renewable Energy Sources," which aims to regulate the reduction of energy consumption, especially in buildings.

The Legislative Decree 192/2005 established the mandatory Energy Performance Certificate (APE) in Italy. The legislation covers several key aspects, including:

·         the methodology for assessing a building’s energy performance;

·         the obligation to disclose energy performance information during property sales or leases;

·         the general guidelines for certifying buildings’ energy efficiency; and

·         enforcement of minimum energy performance requirements.

The APE is required for the construction of new buildings, major renovation projects and sale, donation or rental of buildings.

In 2022, heating and cooling in the built environment constituted 44% of Italy’s final energy consumption. Therefore, several measures have been taken to reduce the GHG emissions of the building stock, including the following:

• tax deductions for energy efficiency measures;

• obligations regarding renewable thermal energy and integration of renewable energy sources into buildings,

• support for municipal energy efficiency investments and for district heating, such as the Conto Termico programme to support the installations of heat pumps, biomass and solar thermal and other governmental support programmes of co-financing, tax reduction, capital account funds, such as Photovoltaic Roofs (Tetti Fotovoltaici D.M. 12/11/2002).