What is CSRD?
What is CSRD? Who does it affect? And how do you comply? On 5 January 2023, the Corporate Sustainability Reporting Directive (CSRD) went into effect. This new directive modernises and strengthens the rules concerning the social and environmental information that companies have to report.

Corporate Sustainability Reporting Directive (CSRD)

On 5 January 2023, the Corporate Sustainability Reporting Directive (CSRD) went into effect.

This new directive modernises and strengthens the rules concerning the social and environmental information that companies have to report.

Companies will have to publicly disclose detailed and transparent information on how sustainability issues:

  • Affect their own business (risks and opportunities – outside-in perspective).
  • What impacts they have on both people and the environment (inside-out perspective).

What’s the goal?

The new rules will ensure that investors and other stakeholders have access to the information they need to assess investment risks arising from climate change and other sustainability issues.

They will also create a culture of transparency about the impact of companies on people and the environment.

Finally, reporting costs will be reduced for companies over the medium to long term by harmonising the information to be provided.

Who does it apply to?

A broader set of large companies, as well as listed SMEs, will now be required to report on sustainability – approximately 50,000 companies in total.

It applies to over 49,000 organisations, compared to 11,700 reporting on NFRD.

When does CSRD come into effect?

The Corporate Sustainability Reporting Directive (CSRD) went into effect on 5 January 2023.

Companies need to disclose depending on their size:

Phase Deadline Companies affected
1 1/1/2024

Large companies with over 500 employees that are already subject to the Non-Financial Reporting Directive (NFDR) that meet at least 2 of the following 3 requirements

  • more than 500 employees
  • 40 million euro in net turnover
  • 20 million euro in assets
2 1/1/2025

Large companies that meet at least two out of three specified requirements:

  • more than 250 employees and/or
  • 40 million EUR in turnover and/or
  • 20 million EUR in total assets  

Companies in the second phase will have to start reporting according to the CSRD requirements in 2025, with the reports to be published in 2026​.

3 1/1/2026

Small and medium-sized enterprises (SMEs) listed on EU-regulated markets that exceed at least two of these thresholds:

  • more than 10 employees
  • more than 700,000 EUR in net turnover
  • more than 350,000 EUR in total assets

CSRD will not cover enterprises with less than 10 employees or below 2 million EUR.

SMEs and other small and non-complex institutions must implement the CSRD and align it to the ESRS from the financial year 2026. However, they will have the option to opt out of the reporting rules until 1st January 2028.

4 1/1/2028

CSRD will be applied to non-EU-country companies that meet the following requirements:

  • a net turnover exceeding 150 million EUR in the EU and
  • at least one subsidiary or branch in the EU

Is it mandatory?

Yes

How do you become compliant with CSRD?

4 pillars for Disclosure:

  1. Double Materiality
  2. ESRS (European Sustainability Reporting Standards)
  3. Third-party assurance
  4. Include in the management report

Steps to compliance

  1. Collect data
  2. Report data
  3. Obtain third-party verification

How we can help

This is a complex task with many requirements, so our expertise could help and support you in completing the steps required to disclose properly.

Our digital carbon accounting tool makes it easy to collect, analyse, and report your data for compliance.

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