Corporate Sustainability Reporting Directive (CSRD)

The Corporate Sustainability Reporting Directive (CSRD), formalised as Directive (EU) 2022/2464, significantly updates the Non-Financial Reporting Directive (NFRD) to address gaps in sustainability disclosures.

The Corporate Sustainability Reporting Directive (CSRD) took effect on 5 January 2023. EU Member States had to include it in their national laws by 6 July 2024. Companies covered by this directive must submit their first reports for the 2024 financial year in 2025.

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Employees discussing CSRD corporate sustainability reporting directive

Key principles of the CSRD:

Double materiality:
At the heart of the CSRD is the principle of double materiality, which requires companies to report on:

  • The impact of their operations on sustainability issues, such as climate change, biodiversity, and social outcomes.
  • The risks posed by sustainability challenges to the business, such as climate-related financial risks or regulatory changes.

This dual perspective ensures that businesses provide a comprehensive view of their operations, highlighting their contributions to sustainability and their preparedness for challenges. For instance, a company reporting on its carbon emissions would also need to disclose how evolving climate policies might impact its financial performance.

The adoption of the CSRD reflects the European Union’s ambition to become a global leader in sustainability.

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