Meeting the Corporate Sustainability Reporting Directive (CSRD)

What is the Corporate Sustainability Reporting Directive (CSRD)?

The Corporate Sustainability Reporting Directive (or CSRD) is a European Union (EU) directive, which changes the way organisations must disclose and report information on environmental, social, and corporate governance (ESG) performance. The CSRD is meant to improve transparency and comparability of sustainability reports among EU organisations and their value chain, enabling stakeholders to make informed decisions and drive sustainable investments towards organisations that prioritise ESG performance. 

Organisations will need to report on risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment, not only their own activities but along the whole value chain.

Unlike some previous reporting, the CSRD reporting is a mandatory framework and is more extensive and highly specific in its disclosure requirements covering ESG compliance.

Organisations will be required to report on sustainability issues such as environmental impact, social impact, and human rights, as well as governance factors including employee matters, anti-corruption and anti-bribery matters.

Changes to CSRD by ESG Omnibus  

On 26 February 2025, the European Commission presented the "Omnibus" package, which proposes important changes to ESG legislation related to the EU Green Deal, including the CSRD. 

The goal of the Omnibus is to reduce the compliance burden for companies and improve their competitive position and resilience by raising thresholds and simplifying reporting requirements. Regarding the CSRD, proposals have been made about the timelines, increasing thresholds for companies subject to reporting and simplification of reporting guidelines (ESRS): 

Timeline modifications
2-year postponement for large companies and listed SMEs.

Modification of thresholds 
Only companies with > 1000 employees and either a turnover > 50 M€ or a balance sheet > 25 M€ will be required to report under CSRD. For non-EU-based companies doing business in the EU the threshold for annual turnover in EU increased from 150 M€ to 450 M€.

Simplifying reporting requirements 

Voluntary reporting based on a standard for SMEs (VSME) developed by the European Financial Reporting Advisory Group (EFRAG)

No more possibility to impose reasonable assurance instead of limited assurance

European Sustainability Reporting Standards (ESRS), are being revised and simplified (less qualitative datapoints, mostly reporting on quantitative datapoints)

Sector-specific standards will be dropped

Develop smarter long-term strategies in the process and take corporate responsibility

The information involved in CSRD reporting won’t be limited to your own operations. It will extend to direct and indirect business relationships across the value chain. This presents a new and challenging aspect of reporting, with greater reliance on input and information from parties you can’t control.

The CSRD also embraces ‘double materiality’ which requires that organisations report on how sustainability matters affect their business and performance. This is in addition to a mandatory assurance obligation for all reported sustainability information.

Whilst these new reporting requirements present challenges, we believe there are also opportunities to build smarter long-term strategies. While improving relationships and reputation across employees, clients, and stakeholders.