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Broadening Sustainability Reporting Obligations

The CSRD is part of the European Green Deal, which is a set of policies and initiatives aimed at making Europe the first climate-neutral continent by 2050. It expands the scope of current environmental, social, and governance (ESG) reporting requirements and the number of companies that must comply with this new standard. It also requires independent third-party audits of companies’ sustainability reports to ensure that the information is accurate and reliable.

Sweeping Impacts

The CSRD marks a new era of non-financial reporting requirements due to rising ESG demands. Requiring standardized reporting to enable more informed investment decisions, the CSRD will significantly impact corporate sustainability reporting in the EU and have an extended ripple effect around the world. These impacts include:

  • Expanded reporting obligations
  • Enhanced disclosure security and audibility 
  • Digitization of sustainability information
  • More supply chain transparency

Frequently Asked Questions About CSRD Compliance

Get answers to your most pressing questions about the CSRD.

Who is in scope of the CSRD?

CSRD reporting requirements currently apply to roughly 50,000 EU companies and will extend in 2025 to include approximately 10,000 additional public and private non-EU companies. To fall in scope of the CSRD, companies need to meet two of the following three thresholds:

  • €40 million in annual net turnover
  • €20 million in assets
  • 250 or more employees

Non-EU companies will be in scope if they have a turnover above €150 million in the EU. They will likely initially feel the CSRD’s impact through their EU subsidiaries.

Businesses that are not required to report under the CSRD but supply to in-scope entities may still be required to complete and comply with ESG requirements for mandatory disclosure. Prepare your business for the CSRD with Assent’s comprehensive suite of solutions.

If our reporting aligns with CSRD requirements, will we also meet Corporate Sustainability Due Diligence Directive (CSDDD) requirements?

While the CSRD and CSDDD are similar, they represent two different legal obligations. The CSDDD targets human rights and environmental risks in the supply chain and outlines measures to manage these risks. In contrast, the CSRD requires companies to report on their sustainability activities more broadly — this will cover elements identified in a CSDDD program, but also include further topics.

How does the CSRD relate to the Non-Financial Reporting Directive?

The CSRD expands the scope of the existing Non-Financial Reporting Directive (NFRD), which has been in effect since 2018. The NFRD requires large publicly traded companies to report on certain non-financial information, such as their environmental and social performance. The CSRD extends this requirement to all large companies, regardless of whether they are publicly traded or not. It also expands the scope of the information that companies are required to report on to include more detailed information about their sustainability risks and opportunities.

What is the European Sustainability Reporting Standard (ESRS) and how is it related to the CSRD?

The ESRS and the CSRD are both crucial parts of the EU’s effort to enhance sustainability performance among businesses. The ESRS is a reporting standard that companies will use to meet CSRD requirements. It provides the framework and methodology for businesses to report their sustainability performance.