The Corporate Sustainability Reporting Directive (CSRD) is one of the European Union’s most ambitious initiatives on sustainability and corporate transparency. It aims to strengthen non-financial disclosure requirements, ensuring that companies provide clear and comparable data on their environmental, social and governance (ESG) impacts.
What is the CSRD and why is it important?
The CSRD replaces and extends the previous Non-Financial Reporting Directive (NFRD), increasing the number of companies obliged to report and setting stricter criteria for reporting. Its importance lies in the need for organisations to be more transparent about their sustainability efforts, allowing investors, consumers and other stakeholders to make informed decisions.
Main novelties of the CSRD directive
Expansion of scope
The CSRD affects many more companies than the NFRD. It is estimated that around 50,000 companies in the EU will have to comply with the regulation, including large companies and, progressively, listed SMEs.
Uniform reporting standards
Introduces the European Sustainability Reporting Standards (ESRS), ensuring that the information reported is comparable and verifiable.
Mandatory verification
The information provided must be audited by an independent third party, ensuring its reliability and credibility.
Dual materiality
Companies should report not only how ESG factors impact their business, but also how their activities affect society and the environment.
Integration with other regulations
The CSRD is aligned with global initiatives such as the UN Sustainable Development Goals (SDGs) and the Task Force on Climate-related Financial Disclosures (TCFD) framework.
Affected companies and timelines
The implementation of the CSRD will be staggered:
- 2024: Companies already subject to the NFRD will have to start reporting under the CSRD in 2025.
- 2025: Large companies that were not included in the NFRD.
- 2026: Listed SMEs, with certain exceptions until 2028.
- 2028: Foreign companies with significant operations in the EU.
The CSRD marks a turning point in the way companies approach sustainability. While it represents a challenge in terms of compliance, it also opens up opportunities for those organisations that adopt a robust and transparent ESG strategy. Adapting to this regulation will not only ensure legal compliance but will also strengthen companies’ competitiveness and resilience in the long term.