What are the main Corporate Sustainability Reporting Directive (CSRD) requirements?

This article explores the Corporate Sustainability Reporting Directive (CSRD), a key tool in the EU's Green Deal. The CSRD requires firms to disclose sustainability information, promoting transparency and comparability in Europe's march towards climate neutrality by 2050.

What are the main CSRD requirements?

Grand “Answer”:

The main requirements of the Corporate Sustainability Reporting Directive (CSRD) focus on companies disclosing their sustainability-related information. This includes reporting on the impact of corporate activities on the environment and society [1]. Additionally, the CSRD mandates the audit (assurance) of the reported information to ensure its reliability and accuracy [1]. These requirements are part of the European Union's efforts to achieve the goals of the Green Deal, which aims to make Europe the first climate-neutral continent by 2050 [1]. By implementing these requirements, the CSRD aims to enhance transparency, comparability, and consistency in sustainability reporting across the EU [1].



Corporate sustainability reporting
EU rules require large companies and listed companies to publish regular reports on the social and environmental risks they face, and on how their activities impact people and the environment.

Corporate Sustainability Due Diligence directive

The European Commission has embarked on a new era of sustainability with the Corporate Sustainability Reporting Directive (CSRD), a key component of its European Green Deal. The directive introduces stricter regulations and broadens the scope of companies obligated to report on their social and environmental impact. Whereas the previous Non-Financial Reporting Directive (NFRD) applied to about 11,700 public-interest entities, the CSRD extends these requirements to approximately 50,000 large companies, including listed SMEs.

The CSRD also brings a new rigor to sustainability reporting, enforcing fixed standards and mandatory auditing, ensuring that the information provided by companies is relevant, reliable, comparable, and easily accessible. The applicability of the CSRD, however, hinges on the company's legal form, exempting public entities from the directive. Still, companies not formally bound by the directive, such as Public Service Media (PSM), may choose to adopt its reporting standards voluntarily. Adopting these standards can enhance stakeholder engagement, promote sustainable practices, and lead to a positive social impact and an improved brand value, addressing the rising consumer demand for sustainable organizations.

CSRD: Main Implications
CSRD: Main Implications 

CSRD: Main Implications

Adopted in late 2022 and effective from January 2023, the CSRD is set for phased implementation from 2024 to 2028 based on company size and type. The directive introduces comprehensive reporting requirements that demand transparency about a company's business model, strategic resilience to sustainability risks, targets and progress, governance structure, policies, impacts, risks, and more.

This in-depth reporting necessitates qualitative and quantitative data, covering forward-looking and retrospective information on short, medium, and long-term horizons. In complying with the CSRD, companies must follow the European Sustainability Reporting Standards (ESRS) developed by the European Financial Reporting Advisory Group (EFRAG). The Commission is expected to adopt the first set of these standards, which will cover all sustainability topics, by mid-2023. Following this, industry-specific standards will be introduced by 2024.

Particularly, the Commission might establish unique standards for the audiovisual sector in response to the increasing carbon footprint of the media industry. In summary, the CSRD is a crucial stride towards a more sustainable European economy. It propels a broader range of companies towards greater transparency and sustainability, whether they are directly bound by the directive or not, there by driving the EU's ambitious Green Deal targets.

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