SFDR defers to local employment law. You must count employees according to national definitions, not EU SFDR definitions. The Accounting Directive exemption does not remove your SFDR PAI disclosure duty.
500 employee principal adverse impact (PAI) threshold: For the purposes of Articles 4(3)-4(4) SFDR, should “the average number of 500 employees” be understood to include workers who are assigned to the financial market participant even though they are employed by a third party that invoices their services back to the financial market participant, e.g. interim workers or workers that are employed by other organisations within a group for instance as part of shared-service centres? Furthermore can the exemption in Article 23(5) of the Directive 2013/34/EU of the European Parliament and of the Council (‘Accounting Directive’), which grants Member States the right to exempt parent companies that are themselves the subsidiary of a larger group from drawing up consolidated financial statements and a consolidated management report under that Directive, apply to a “parent undertakings of a large group” as referred to in Article 4(4) SFDR?
As a general rule, and unless specifically defined in an applicable Union legal act, the definition of who constitutes an employee is governed by national law. Since SFDR does not contain a definition of who constitutes an employee, it must therefore be determined by reference to the definition of employee set-out in the applicable national law. The exemption in Article 23 of the Accounting Directive has no bearing on the disclosure obligations set out in Article 4(4) SFDR. These disclosures must be published and maintained on the website of the financial market participant. They are not part of the latter’s management report even when the financial market participant falls within the personal scope of the Accounting Directive.
European Commission
