CSRD (Corporate Sustainability Reporting Directive)

The Corporate Sustainability Reporting Directive (CSRD) is the European Union regulation that establishes mandatory sustainability reporting requirements for companies operating in the EU. It was adopted in January 2023 and replaces the earlier Non-Financial Reporting Directive (NFRD).

Key features of the CSRD include:

• Standardised reporting through the European Sustainability Reporting Standards (ESRS)
• Double materiality assessment to determine which topics are relevant
• Mandatory limited assurance from an independent auditor
• Digital tagging in XBRL format for machine-readability
• Integration into the company’s annual management report

The directive applies in phases: large public-interest entities from 2025 (FY2024), all large companies from 2026 (FY2025), listed SMEs from 2027 (FY2026), and qualifying non-EU companies from 2028 (FY2027).

Over 50,000 companies across Europe are expected to fall under the CSRD’s scope, making it the most comprehensive sustainability disclosure regulation in the world.