The Corporate Sustainability Reporting Directive (CSRD) was introduced as a new disclosure standard in response to identified shortcomings in the Non-Financial Reporting Directive (NFRD) after an evaluation by the European Parliamentary Research Service (EPRS) in 2021. The NFRD lacked consistent and comparable data, hindering sustainability investments, and raising data costs for stakeholders. The CSRD aims to enhance disclosure processes, providing investors and consumers with a more straightforward and consistent means of understanding and comparing the environmental, social, and governance (ESG) impact of organisations. The directive ultimately seeks to reduce climate risk and improve overall EU sustainability, aligning with the 2050 climate-neutrality target and European Green Deal initiatives.

The CSRD applies to various organization’s, including large, listed undertakings, EU-based large undertakings (listed or not), and third-country undertakings, with compliance phased in from 2024 to 2029 based on NFRD legacy or company size. Compliance requires adherence to European Sustainability Reporting Standards (ESRS) developed by the European Financial Reporting Advisory Group (EFRAG). The ESRS cover cross-cutting, environmental, social, and governance reporting, with the focus on double materiality – (need a space before and after the dash) considering both impact materiality and financial materiality.

Download PDF or view

CELEX_32022L2464_EN_TXT_ Directives csrd-delegated-act-2023-5303-annex-1_en csrd-delegated-act-2023-5303-annex-2_en