Size is one of the factors legislators use to determine who falls under which obligation. Not every company gets the same rules; most ESG legislation is built around thresholds, and thresholds are by definition a matter of size. Number of employees, revenue, balance sheet total: these are the metrics that come up repeatedly, in different combinations and with different limits per regulation.
That makes size one of the first questions a board must ask itself, and one of the hardest to answer unambiguously. A company that falls just under a threshold on one metric may already be over it on another. And because different regulations apply different thresholds, a company may qualify for one obligation but not for another.
The precise threshold values, and which combination of metrics counts, differ per regulation and change with legislative amendments. We do not cite figures here: you will find those in the current statutory text or the accompanying explanatory notes, not in a summary that quickly becomes outdated. What is certain, however, is the principle: the larger the company according to the metrics applied, the sooner and the more extensive the obligations become. Smaller companies sometimes escape entirely, and sometimes a lighter form of reporting or a longer transition period applies to them.
Size does not operate only at the company level. In a group structure, the size of the group as a whole can be decisive, even if an individual entity within that group is small. That is one reason why your legal form plays a role in the assessment: the legal structure partly determines whether, and how, size is counted at group level.
Size is not a fixed characteristic. A company that grows, undergoes a merger, divests a subsidiary, or simply has a good year in terms of revenue can shift to a different threshold. This can work in two directions: a company that exceeds a limit for the first time acquires obligations that did not previously exist; a company that shrinks may fall out of scope. What is often underestimated in this is the delay: many regulations do not look at the current year but at a number of preceding years, so changes take effect with a delay. A board that only looks at current figures may miss an obligation that is already on its way. A more extensive discussion of this dynamic is available on the page about what changes to your obligations when your size changes.
Size plays a role, but not in isolation. The same size can lead to different obligations depending on what a company makes or sells, as explained on the page about how your product determines which ESG rules apply, and depending on where the company is active. The same applies to the countries in which activities take place: the question of how the countries in which you operate determine the applicable rules is a separate factor, but it touches on size because national implementations of European regulation often apply slightly different thresholds or slightly different calculations than the underlying European text. A company active in multiple member states can therefore encounter slightly different size limits than it would expect in its own country. This is precisely where many boards go wrong: they assume that a European threshold is applied identically everywhere, while the national legislator may have taken room during transposition to set slightly different figures or slightly different calculations.
The Compliance Check does not start from one fixed list of rules, but from the combination of factors that apply to your company, of which size is one of the most important. For every obligation that follows from that combination, the check assigns an owner, specifies what evidence is required, and which control belongs to it. That is also why a change in size is not merely an accounting fact, but a moment at which the question "which obligations now apply to us" must be asked again. The same, incidentally, applies to legal form: a change there has its own consequences, which are addressed on the page about what changes to your obligations when your legal form changes.
The tool that translates this combination of factors into an overview with owner, evidence, and control is under construction. Anyone who needs this now can join the waiting list; nothing is offered that does not yet exist.
Once it is clear which obligations apply based on size, legal form, product, and country, another question follows: how much work is required to provide the corresponding evidence for each obligation, and who does that work. That is a question about tasks, not about rules, and that is what the work scan from FTE TO AI is designed for. It calculates per task what portion of the work can be taken over by AI, so that an organization not only knows what needs to happen, but also gets an indication of how much capacity that requires and where that capacity can come from.
Vraag maar welke verplichting op u van toepassing is, en waaraan u dat kunt aantonen.
Answers come from this site’s knowledge base. Not tailored advice, and not a scan of your company.