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What are the requirements of Europe's Corporate Sustainability Reporting Directive (CSRD)?

The EU voted to adopt the Corporate Sustainability Reporting Directive (CSRD) on 10 November 2022, after months of design and policy making to improve on perceived weaknesses in the previous Non-Financial Reporting Directive (NFRD).  The EU is leading in sustainability regulation, and CSRD also helps to show a pathway for other countries.

CSRD & NFRD: How is EU ESG regulation changing?

  • Why? Regulation is improving to ensure more companies set informed and realistic targets, and to prevent greenwashing.

  • What? More detailed reporting requirements on companies’ environmental, human rights and social impact.

  • Who? Around 50,000 companies, up from the current 11,700 - listed companies and those with more than 250 employees and/or €40 million in turnover and/or €20 million in total assets.

  • When? Eligible companies begin or transition to CSRD-reporting between 2024 to 2028, when exactly will depend on the size, turnover, and location of the business.

  • How? The digitalisation of standardised ESG data (machine-readable), audit of ESG information, and reporting that is consistent with the SFDR and EU taxonomy.

What are the perceived limitations of NFRD?

  • Little to no regulation for SMEs and VSEs despite making up 90% of the global economy

  • Inconsistency of reporting and associated challenge to compare across companies

What will the CSRD reporting requirements be?

CSRD requirements largely follow recommendations laid out by the Taskforce for Climate-related Financial Disclosures (TCFD).  This means:

  • Disclosing governance, strategies, targets, and perceived risks and opportunities pertaining to sustainability.

  • Quantitative and qualitative results for environmental and social impact, together with the methodologies used to prepare them - the latter being an important shift from current regulation and practice.

  • Any restatements from previous years.

  • Stated and consistent organisation boundaries with financial reporting.  The provision of quantitative information outside of these boundaries (e.g. Scope 3 GHG emissions) is encouraged where material to the reporting organisation but is not required by the CDSB Framework.

Environmental factors

  • Climate change mitigation and adaption

  • Water and marine resources

  • Resource use and the circular economy

  • Pollution

  • Biodiversity and ecosystems

Social factors    

  • Equal opportunities

  • Working conditions

  • Human rights

Governance factors

  • Oversight bodies

  • Business ethics and corporate culture

  • Corporate political commitments

  • Management and quality of relationships with suppliers

  • Corporate internal control and risk management systems

The full framework can be found here.

When will CSRD be implemented, and to who?

Eligible companies must transition from the NFRD to the CSRD between fiscal years 2024 to 2028 - when exactly will depend on the size, turnover and location of the business:

  • From 1 January 2024 for large public-interest companies (with over 500 employees) already subject to the non-financial reporting directive, with reports due in 2025;

  • From 1 January 2025 for large companies that are not presently subject to the non-financial reporting directive (with more than 250 employees and/or €40 million in turnover and/or €20 million in total assets), with reports due in 2026;

  • From 1 January 2026 for listed SMEs and other undertakings, with reports due in 2027. SMEs can opt-out until 2028.

Read more from the Climate Disclosure Standards Board here.

Sustainability disclosure requirements

For more information about how we can help your business stay on top of carbon reporting regulations, reach out to our team.


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