The Corporate Sustainability Reporting Directive (CSRD) (EU) 2022/2464 significantly expands sustainability reporting requirements for thousands of companies across Europe. Starting with the 2024 financial year, reports published in 2025 must comply with these new standards. The CSRD revises the Non-Financial Reporting Directive (NFRD) by introducing more detailed reporting obligations and broadening the scope of companies required to report.

Key Aspects of the CSRD

The directive mandates companies to disclose environmental, social, and governance (ESG) information, along with key data aligned with the EU Taxonomy. Reporting topics include:

• Environmental impact, such as corporate carbon footprint
• Social responsibility, including impacts across the value chain
• Governance and risk management, covering compliance and sustainability risks

Main Changes Introduced by the CSRD

• Expanded and standardized reporting requirements
• External audit requirement (initially limited)
• Clearer company disclosures following the European Sustainability Reporting Standards (ESRS)
• Mandatory inclusion of sustainability reporting in the management report

Who Must Comply with the CSRD?

The CSRD applies to all capital market-oriented companies and those meeting at least two of the following criteria:

• 250+ employees
• €40 million+ in turnover
• €20 million+ in total assets

From 2026, the directive will extend further, ultimately impacting around 49,000 companies across the EU. Responsibility for compliance lies with company management, boards of directors, and supervisory boards.

What Can Companies Do Now?

• Assess current reporting structures and data collection processes for non-financial metrics.
• Allocate internal resources (budget, personnel, and responsibilities) to prepare for compliance.
• Anticipate indirect obligations, as suppliers may face data requests from customers subject to the directive.
• Implement a transparent sustainability management system to improve investor appeal, enhance market competitiveness, and reduce business risks.

Turning Compliance into an Opportunity

Meeting CSRD requirements strengthens trust among customers, employees, and stakeholders while demonstrating a commitment to sustainability and responsible business practices.

For further insights, we provide our partner law firms with an overview of national ESG regulations and statutory sustainability reporting requirements across various jurisdictions.