Corporate Sustainability Reporting Directive (CSRD)
The Corporate Sustainability Reporting Directive (CSRD) is a European Union (EU) legislation that requires large companies to publish regular reports on their environmental and social impact activities. Introduced in 2023, the CSRD aims to ensure that businesses report reliable and comparable sustainability information, enabling investors, consumers, policymakers, and other stakeholders to evaluate their non-financial performance and make more informed decisions
Why was the CSRD introduced?
- To increase transparency on sustainability matters and support the European Green Deal objectives.
- To meet growing demands from investors, civil society, and other stakeholders for reliable and relevant ESG (environmental, social, and governance) information.
- To level the playing field and prevent fragmentation in sustainability reporting practices across EU member states.
How will the CSRD work?
- It requires companies to report detailed information on their impacts related to environmental, social, and governance matters.
- Reporting will follow the European Sustainability Reporting Standards (ESRS) being developed by EFRAG.
- Companies will need to perform double materiality assessments, considering both impacts on the company and impacts caused by the company.
- Reports will be subject to independent third-party assurance.
Timeline
- April 2021: The European Commission adopted the CSRD proposal.
- November 2022: The CSRD was formally adopted by the European Parliament and Council.
- January 2024: The CSRD will start applying to large companies already subject to the Non-Financial Reporting Directive (NFRD).
- January 2025: The CSRD will apply to all other large companies and listed SMEs.
- January 2026: The CSRD will apply to non-EU companies with significant operations in the EU.
Reference
Corporate sustainability reporting
EU law requires all large companies and all listed companies (except listed micro-enterprises) to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment.
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EU Corporate Sustainability Reporting Directive (CSRD)
The EU has published the new Corporate Sustainability Reporting Directive (CSDR) which revises the Non-Financial Reporting Directive (NFRD). CDSB is working closely with EU Institutions and Member States to ensure a proper review of the Directive across the European Union is achieved using international reference points such as the CDSB Framework for reporting environmental information.
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Making the CSRD accessible for all
A new publication addresses key themes on the implementation of the Corporate Sustainability Reporting Directive (CSRD), the legislation adopted by the EU in December 2022 and now in effect.
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