The Corporate Sustainability Reporting Directive (CSRD) is an EU ESG (environmental social governance) standard introduced by the European Union Council on November 28, 2022. Its purpose is to standardize corporate sustainability reporting, making it as consistent as financial accounting and reporting.
The CSRD was approved by the European Parliament on November 10, 2022, and by the EU Council on November 28, 2022. It will be in effect from January 1, 2024, with large businesses disclosing their first CSRD report for the 2024 financial year in early 2025. SMEs will start reporting for 2026 using the CSRD's guidelines.
The CSRD replaces the existing Non-Financial Reporting Directive (NFRD) and Accounting Directive (2013/34/EU). It will be effective throughout the EU from January 1, 2024. It's estimated that over 50,000 companies operating in Europe will need to comply with ESRS.
Starting January 1, 2024, the CSRD will be applicable to companies with:
Companies fitting the criteria must annually report using the CSRD's sustainability taxonomy. This covers how sustainability influences their business and their impact on people and the environment. The EU Sustainability Reporting Standards (ESRS) outlines the required reporting disclosures. ESRS was developed by the European Financial Reporting Advisory Group (EFRAG) and was adopted by the European Commission on July 31, 2023.
The CSRD replaces the existing Non-Financial Reporting Directive (NFRD) and Accounting Directive (2013/34/EU). It will be effective throughout the EU from January 1, 2024. It's estimated that over 50,000 companies operating in Europe will need to comply with ESRS.
Companies must provide details on their material ESG themes, risks, impacts, and focus areas. They should also disclose sustainability and ESG performance targets, plans aligning with the UN 2015 Paris Agreement, sustainability risks, and their impacts on society and the environment.
Companies must prepare their financial statements in XHTML or electronic format according to the ESEF regulations and the EU sustainability taxonomy. They must then digitally 'tag' their reported sustainability information as specified by the CSRD Regulation.
Organizations will need to seek "limited" assurance of the sustainability information they disclose from a neutral and experienced third party.
The CSRD aims to consolidate various sustainability reporting standards into one comprehensive ESG report, catering to the needs of EU regulators, investors, and other stakeholders.
Screen around 100 CSRD solutions in minutes not weeks, and create an individualized list of solutions.
