January 22, 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.


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 Susanne.Winge@ethos.se, to know more about our services and how we can help you transform to CSRD reporting.