Corporate Sustainability Reporting Directive (CSRD): 2022/2464

  • Updated



European Union (EU)

LEGAL CODE TITLE               

Corporate Sustainability Reporting Directive (CSRD): 2022/2464


DIRECTIVE (EU) 2022/2464

REVISION DATE                     

December14, 2022


European Union


Brands and Retailers


International Trade: Non-Financial Reporting





On 5 January 2023 the Corporate Sustainability Reporting Directive (CSRD) entered into force.

The Corporate Sustainability Reporting Directive (CSRD) is an EU ESG (environmental social governance) standard passed by European Union Council  designed to make corporate sustainability reporting more common, consistent, and standardized like financial accounting and reporting. The CSRD will apply to all companies with:

  1. Over 250 employees
  2. More than 40€ million in annual revenue
  3. More than 20€ million in total assets
  4. Publicly-listed equities and have more than 10 employees or 20€ million revenue
  5. International and non-EU companies with more than 150€ million annual revenue within the EU and which have at least one subsidiary or branch in the EU exceeding certain thresholds

Any EU company that meets that criteria is required to file an annual report using the CSRD's forthcoming sustainability taxonomy on how sustainability influences their business, as well as the company's impact on people and the environment. A first draft of the initial environmental reporting requirements, the EU Sustainability Reporting Standards (ESRS), was released in draft form for public comment on May 3, 2022 by the European Financial Reporting Advisory Group (EFRAG). A later, updated draft was released in November 2022, with EFRAG providing guidance that sector-specific sustainability reporting guidelines would be published later in 2023.

The CSRD updates and replaces the existing Non-Financial Reporting Directive (NFRD), and goes into effect throughout the European Union (EU) in 2023. It's estimated 50,000+ companies who do business in Europe will need to report and comply with ESRS. the European Parliament adopted the Corporate Sustainability Reporting Directive (CSRD) on Thursday, November 10 2022 in a 525 to 60 vote (with 28 abstentions).


More Detailed Requirements

To comply with CSRD, organization's will need to take the following annual compliance steps, starting in 2024:

    1. Prepare and submit a CSRD report - A large company's first CSRD report will be due in early 2025 based on the company's 2024 fiscal year environmental performance. Small and medium enterprises (SMEs) must begin reporting for 2026 using the CSRD's streamlined SME guidelines
    2. Track and disclose the required information - CSRD reports must include management commentary and data (via a dedicated management report section) on a company's:
  • Materiality process to select material ESG themes, topics, risks, and focus areas
  • Sustainability and ESG performance targets, goals, and progress (the CSRD recommends at least absolute greenhouse gas emission reduction targets for 2030 and 2050)
  • The plans of the undertaking, including implementing actions and related financial and investment plans, to ensure its business model and strategy are compatible with the transition to a sustainable economy and limiting global warming to 1.5 °C in line with the UN 2015 Paris Agreement and the objective of achieving EU climate neutrality by 2050 as established in Regulation (EU) 2021/1119 of the European Parliament and of the Council
  • Sustainability risks (including climate change) affecting the company, as well as the organization's operating impacts on society and environment
  • The resilience of the undertaking’s business model and strategy in relation to risks related to sustainability matters
  • How sustainability and ESG risks could or are impacting operating results and business performance
  • Where relevant, the exposure of the undertaking to coal-, oil- and gas-related activities
  • Environmental protection policies and actions
  • Company sustainability policies
  • A description of the company's sustainability due diligence
  • Social responsibility and treatment of employees
  • Respect for human rights
  • Anti-corruption and bribery practices
  • Corporate ESG governance in relation to sustainability matters, the administrative, management and supervisory bodies' expertise and skills in relation to fulfilling these responsibilities
  • Corporate board diversity
  • Important social, human, and intellectual capital
  • How the undertaking’s business model and strategy take account of the interests of the undertaking’s stakeholders and of the impacts of the undertaking on sustainability matters
  1. Digital data and tagging - Companies must prepare their financial statements and management statement in XHTML or electronic format in accordance with the ESEF regulations and the EU sustainability taxonomy, then digitally ‘tag' their reported sustainability information according to a digital categorization system specified by the CSRD Regulation.
  2. Third party assurance - Organizations reporting under CSRD will also be required to seek "limited" assurance of the sustainability information they disclose from a neutral, trusted, and experienced third party who reviews the data. "Limited" assurance is less strict than a financial audit, but still requires working with an independent sustainability reporting partner organization or auditor

CSRD reporting must be submitted in a compliant electronic reporting format specified in Article 3 of Commission Delegated Regulation (EU) 2019/815 no later than 12 months after a company's balance sheet date.

Additional resources:





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