Knowledge

What does CSRD entail?

 

The CSRD (Corporate Sustainability Reporting Directive) is a European Union directive that requires companies to make comprehensive reports on their sustainability, environmental, social and governance (ESG) impacts. The CSRD builds on the existing NFRD (Non-Financial Reporting Directive), but significantly expands its scope and requirements.

 

These are the main features of the CSRD:

 

1. More extensive reporting requirements

Companies must provide more detailed information on their sustainability efforts, including their environmental impact, social policies, diversity, human rights, anti-corruption measures, and the impact of their activities on climate change.

 

2. Scope of application

The CSRD applies to a broader range of companies compared to the NFRD. This includes all large companies (as defined by the EU) and all listed companies, including small and medium-sized enterprises (SMEs), with some exceptions.

 

3. Auditing and verification

The reported sustainability information must be verified by a third party, adding an extra layer of transparency and reliability.

 

4. Harmonization of standards

The CSRD requires companies to report according to uniform, EU-wide reporting standards specifically developed for sustainability reporting. This should ensure that information is comparable and consistent across companies and sectors.

 

5. Digital reporting

Companies must submit their sustainability reports digitally in a common format established by the EU, facilitating access to and analysis of this data by stakeholders, such as investors and regulators.

 

The CSRD aims to increase transparency on the sustainability performance of companies and to better inform investors and other stakeholders about the risks and opportunities associated with sustainability. It plays a central role in the broader EU strategy to ensure a more sustainable and resilient economic system.