A short guide to the CSRD

Corporate Sustainable Reporting Directive


EU sustainability reporting involves all stakeholders

The CSRD is part of the ambitious European sustainable finance strategy and should be a powerful lever for integrating CSR issues into the governance and management of a company.The objective is to direct investments towards sustainable activities, to integrate the analysis of sustainability risks in the company's strategy, to encourage transparency and to promote a long-term vision.With the CSRD, sustainability reporting will aim to provide evidence of the sustainable transformation of a company.

With the EU Taxonomy and SFDR (Sustainable Finance Disclosure Regulation), the EU ensures companies disclose all necessary information on how they operate and manage their environmental and social challenges.Soon EU CSRD will regulate sustainable decision-making for investors and other relevant stakeholders based on credible sustainability-related data.

On 10 November 2022, the European Parliament formally adopted the CSRD, which will extend sustainability reporting requirements to 38,000 companies.The CSRD replaces the Non-Financial Reporting Directive (NFRD), which was a first step in order to drive sustainability disclosures by corporates but needed to be broadened. NFRD applied to 11,700 corporates, whereas the CSRD will catch 50,000.

CSRD : 4 things businesses need to know

What is new ?

The CSRD introduces more detailed reporting requirements on companies’ impact, based on common criteria in line with the EU’s climate goals. These extra reporting requirements show an increased focus in reporting on double materiality, alignment to the Paris Agreement (1.5°C-2°C limit), and forward-looking sustainability information.The European Financial Reporting Advisory Group is expected to publish the draft on sustainability reporting standards in the coming weeks, with the first set of standards to be adopted by 30 June 2023.

What is double materiality ?

CSRD requires companies to disclose not only risks to themselves, but also their adverse impacts on both the planet and society. This ‘double materiality’ concept acknowledges the fact that risks and opportunities can be material from both a financial and non-financial perspective.Double materiality recognizes that companies must manage and take responsibility for the actual and potential adverse impacts of their decisions on people, society and the environment.

What is the scope and timing ?

Reporting on fiscal year 2024 (for publication in 2025) for companies currently subject to the NFRD (Turnover > €40M or total balance sheet > €20M and # employees > 500)Reporting on the 2025 fiscal year (for publication in 2026) for other large companies with more than 250 employees (2 of the 3 thresholds: turnover > 40M€ or balance sheet total > 20M€ or # employees > 250)Reporting for the year 2026 (for publication in 2027) for listed SMEs.

What happens next ?

The Council of the EU is expected to adopt the proposal on 28 November 2022, after which it will be published in the Official Journal of the EU. The directive will enter into force 20 days after publication. EU Member States will then have 18 months to transpose the CSDR into their national laws.

Make compliance easy

New EU Regulations are complex and require experts & tools.Greenscope helps corporates measure, disclose and improve their sustainability levels according to new EU sustainable standards (EU Taxonomy & CSRD).Greenscope is the one-stop-shop sustainability reporting software, generating substantial time and cost savings thanks to its modern SaaS platform.Contact us and request a demo

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