CSDR

The CSRD is an initiative by the European Union to enhance the scope and reliability of sustainability reporting across EU member states. It replaces and expands upon the earlier Non-Financial Reporting Directive (NFRD). 

Here are some key points about the CSRD:

1. Increased Transparency: The directive aims to provide greater transparency on social and environmental issues within corporate reporting.
2. Broader Applicability: It expands the number of companies required to comply, including all large companies and all companies listed on regulated markets (except listed micro-enterprises).
3. Standardization of Reporting: The directive introduces more detailed reporting requirements and ensures that all reported information is consistent and comparable across different companies and industries.
4. Audit Requirement: Reports prepared under the CSRD need to be audited for accuracy and compliance, adding an additional layer of reliability to the disclosures.
5. Digital Format: It requires that the reports be available in a digital format, making them more accessible to stakeholders.

This directive is part of the EU’s broader strategy to integrate sustainability into corporate governance and to enhance the focus on long-term sustainable and ethical behavior in all sectors.

The Corporate Sustainability Reporting Directive (CSRD) of the European Union significantly expands the scope of companies covered by sustainability reporting requirements. Here is an overview of the types of companies affected based on current directives and their planned evolution in the coming years:

Starting in 2024 (for fiscal year 2023 reports):

• Large companies already subject to the Non-Financial Reporting Directive (NFRD), which have more than 500 employees.
• These companies must have either a balance sheet total exceeding 20 million euros or a net turnover exceeding 40 million euros.

Starting in 2025 (for fiscal year 2024 reports):

• The obligations will extend to all large companies, whether listed or not, including those with more than 250 employees and an annual turnover exceeding 40 million euros or a balance sheet total exceeding 20 million euros.

Starting in 2026 (for fiscal year 2025 reports):

• Listed SMEs on regulated markets will also be affected, except for micro-enterprises.
• Non-European companies generating a net turnover of more than 150 million euros in the EU, and having at least one subsidiary or branch in the EU, will also need to comply.

This gradual expansion of requirements means that more and more companies will need to be transparent about their environmental, social, and governance (ESG) impacts. This includes aspects such as greenhouse gas emissions, labor practices, and corporate governance, to promote a more sustainable and responsible economy.