Effective, Proportionate and Dissuasive? The Finnish Sanctions Framework under the Corporate Sustainability Reporting Directive

Abstract

This thesis examines the Finnish sanctions framework for sustainability reporting under the Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464, CSRD). The Directive requires Member States to provide for penalties that are “effective, proportionate and dissuasive”, but leaves the design of enforcement mechanisms largely to national legislators. The practical impact of the CSRD therefore depends on how this requirement is implemented at Member State level. The central research question of the study is whether the Finnish enforcement framework for CSRD sustainability reporting fulfils the EU-law requirement of effectiveness, proportionality and dissuasiveness. The analysis focuses on administrative enforcement mechanisms, civil liability, criminal liability and institutional allocation of supervisory responsibilities.

The thesis is based primarily on the legal dogmatic method. It systematises and interprets EU and Finnish legislation, including the CSRD and its national transposition into the Accounting Act, the Auditing Act and related legislation. In addition to doctrinal analysis, the study adopts an evaluative approach grounded in EU enforcement principles, particularly the requirement that penalties ensure the practical effectiveness (effet utile) of EU law.

The findings indicate that the Finnish framework formally complies with the Directive’s requirements. Administrative supervisory mechanisms and corrective measures exist, civil liability is integrated into general corporate law, and criminal liability remains available only under adjacent contexts. However, the system relies predominantly on administrative oversight and corrective measures rather than on severe punitive sanctions. The absence of sustainability-specific criminal provisions reduces the dissuasive character of the framework.

The study concludes that the Finnish system can be considered formally effective and proportionate, but its dissuasiveness is more limited. The enforcement model emphasises compliance correction and transparency rather than punitive deterrence. As a result, the framework risks ensuring formal reporting compliance without necessarily guaranteeing substantive reliability of sustainability information. The thesis demonstrates that the credibility of information-based environmental regulation ultimately depends on the strength and coherence of national enforcement structures.