March 26, 2024

The Corporate Sustainability Reporting Directive in brief

The Corporate Sustainability Reporting Directive (CSRD) replaces the Non-Financial Reporting Directive (NFRD) and mandates sustainability reporting for four main company groups. CSRD requires annual disclosure of sustainability impacts, risks, and opportunities (IROs) as part of the management report, following the European Sustainability Reporting Standards (ESRS). The reporting content will be determined through the mandatory double materiality analysis. CSRD aims to standardize and enhance transparency in sustainability reporting, allowing investors and stakeholders to assess and compare sustainability performance across the European Union.

What companies are in scope to report according to CSRD?

The CSRD will be implemented step-wise through four main company groups. The initial group is listed companies with +500 employees and currently reporting according to the non financial reporting directive that will publish the first report 2025. The last group is non-EU parent companies that will be obliged to publish their report 2029. See picture below.

CSRD in the Swedish context

On 15 February, a referral was released by the Swedish government presenting the Swedish legislative changes regarding new requirements to implement the CSRD into Swedish legislation. The main updates are:

Application timing: Large publicly traded companies and groups with over 500 employees should apply the new rules for the first time for the financial year starting immediately after June 1, 2024. This means that for companies in this size category without a broken fiscal year, the first reporting year will be 2025 instead of 2024 as previously proposed.

Reporting thresholds: The threshold for what is defined as a large company (Group 2) is specified:
Net turnover has increased from SEK 350 million to SEK 550 million, the balance sheet total is increased from SEK 175 million to SEK 280 million. This represents an increase of 57% and 60%, respectively, compared to the EU's inflation increase of 25%.

Effective date of legislative changes: The proposal is for the legislative changes to take effect on July 1, 2024.

The Non-Financial Reporting Directive VS the Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (CSRD) replaces the Non-Financial Reporting Directive (NFRD) and mandates sustainability reporting for all companies in scope.

What are the key requirements in CSRD reporting?

  • The sustainability report should be part of the management report meaning it needs to shift to align with the annual financial reporting cycle
  • The European Sustainability Reporting Standards (ESRS) must be used
  • The ESRS includes the requirement to report in line with information in the EU Taxonomy
  • Mandatory double materiality analysis to assess the financial and impact materiality
  • Externally assured (limited assurance, minimal auditing requirements at start)
  • The sustainability information should be digitally tagged using the XHTML format
  • The Board of Directors is responsible for the published information to the same scrutiny as the financial information
  • The published information is subject to the same scrutiny as the financial information.

What is the European Sustainability Reporting Standards (ESRS)?

Whilst the CSRD requires companies to report - the ESRS defines the sustainability topics of the double materiality analysis and the methodology of determining material topics. The ESRS contains of 12 different standards; 2 overarching and 10 topic-specific, see below.

Watch our webinar episode on the fundamentals of CSRD and ESRS to know more.

Contact our Head of Corporate Sustainability, Susanne Winge at, to know more about our services and how we can help you transform to CSRD reporting.