About the Corporate Sustainability Reporting Directive (CSRD)

  • The Corporate Sustainability Reporting Directive extends the scope and reporting requirements of the already existing Non-Financial Reporting Directive – a regulatory framework that mandates sizeable public interest entities to report on their sustainability performance since 2018.
  • With its new requirements, the CSRD aims to ensure that businesses report reliable and comparable sustainability information to re-orient investments towards more sustainable technologies and companies.

Who is subject to the CSRD?

While the NFRD only requires companies with more than 500 employees to report on their sustainability performance, the CSRD will require all large companies – that means companies with more than 250 employees and more than €40M turnover and/or more than €20 Million in total assets – and all listed companies (except micro-enterprises) to report on their sustainability.

As soon as put into force, nearly 50,000 companies in the EU will need to follow detailed EU sustainability reporting standards, corresponding to 75% of all EU companies turnover.

What will have to be disclosed?

Additional to the NFRD disclosures on a companies’ efforts in:

  • Environmental protection
  • Social responsibility and treatment of employees
  • Respect for human rights
  • Anti-corruption and bribery and
  • Diversity on company boards

Businesses will also have to start reporting on how sustainability risks might affect their performance.

While the EU provides voluntary reporting guidelines for NFRD reports, the CSRD introduces more detailed reporting requirements and requirements to report according to mandatory EU sustainability reporting standards.

The CSRD reporting will align with the already existing Sustainable Finance Disclosure Regulation and the EU Taxonomy. (Learn more about the EU Taxonomy with Plan As Whitepaper).

What are the next steps?

As of this state, the CSRD is still a proposal by the European Commission. The European Parliament and the European Council still have to agree on it. This is expected to be happening within the next few months. Once that happens, these are the following milestones:

  • End of 2022: EU Member States will have to adopt the EU Directive into national law
  • 2024: Businesses will have to report according to a first set of Sustainability Reporting Standards for the financial year 2023
  • 2025: Businesses will have to report according to a first set of Sustainability Reporting Standards for the financial year 2024
  • 2027: Small and medium enterprises will have to start reporting to a separate, proportionate reporting standard

What does that mean for businesses?

2023 is closer than it seems. To be fully prepared, businesses should start collecting data now.

It is not easy to stay on top of the requirements and understand which data must be collected and when to disclose it. We at Plan A are happy to support you. Get in touch with us.