CSRD (Corporate Sustainability Reporting Directive)
New European Union regulation that reinforces companies’ obligation to report sustainability information, expanding its scope, standardizing reports, and requiring the double materiality approach.
Description:
The CSRD (Corporate Sustainability Reporting Directive) is a European regulation adopted in December 2022 that replaces the former NFRD (Non-Financial Reporting Directive). It aims to improve the quality, transparency, and comparability of sustainability reports across the EU.
Key innovations include:
- Wider scope: Applies to more companies, including large corporations and listed SMEs that exceed certain financial or employee thresholds.
- Unified standards (ESRS): Establishes a common reporting framework developed by EFRAG.
- Double materiality: Requires reporting on both how sustainability affects the company and how the company impacts society and the environment.
Implementation timeline: The directive came into force on January 1, 2024. Companies already under the NFRD will report in 2025 on 2024 data. Others will follow progressively in the coming years.
Simplification proposal: In 2025, the European Commission proposed reducing the administrative burden on SMEs, exempting many from compliance and limiting the data large companies and financial institutions can request from them.
CSRD is a key step toward a more transparent and sustainable economy, although its implementation is being adjusted to balance requirements with business feasibility.