A Guide to the Corporate Sustainability Reporting Directive (CSRD)

Driving expense compliance and sustainable growth

The Corporate Sustainability Reporting Directive (CSRD) represents a transformative step in enhancing corporate transparency within the European Union.  

As a critical part of the European Green Deal, the CSRD compels businesses to provide detailed disclosures of their environmental, social, and governance (ESG) impacts. 

The CSRD mandates standardised ESG reporting, ensuring that businesses contribute to a sustainable future while aligning their operations with regulatory and market expectations. 

CSRD is an opportunity for businesses to show their commitment to sustainability, meet regulatory demands, and strengthen stakeholder trust. 

According to a PwC 2023 study, over 75% of investors now prioritise CSRD disclosures when making funding decisions. With ESG considerations increasingly influencing investment decisions, compliance with the CSRD can enhance a company’s attractiveness to socially conscious investors. 

What is the 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 January 5, 2023. EU Member States had to include it in their national laws by July 6, 2024. Companies covered by this directive must submit their first reports for the 2024 financial year in 2025. 

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.

The directive aims to: 

• Close gaps in non-financial reporting by introducing comprehensive and standardised sustainability disclosures.
• Empower stakeholders, including regulators and investors, with consistent and reliable environmental, social, and governance data to make informed decisions.
• Encourage businesses to address their sustainability impacts while building resilience against climate risks and other environmental and social challenges. 

The new 2025 CSRD requirements and reporting standards require from companies to adapt to stricter regulations and enhanced disclosure expectations. 

With Belgium implementing the CSRD through a phased approach starting in FY 2024, businesses operating in the region must understand and prepare for these obligations as a matter of urgency.  

By understanding and preparing early, organisations can ensure compliance and establish itself as a leader in sustainability. 

CSRD requirements and reporting standards 

The CSRD introduces strict reporting obligations under the European Sustainability Reporting Standards (ESRS). 

The Corporate Sustainability Reporting Directive (CSRD) mandates that companies disclose detailed information on how their activities impact the environment and society. This includes data on environmental factors like greenhouse gas emissions, social aspects such as employee well-being, and governance issues like board diversity.  

To standardise these disclosures, companies must adhere to the European Sustainability Reporting Standards (ESRS), which provide guidelines on the methodology and metrics for reporting.

The ESRS ensures that Environmental, Social, and Governance (ESG) data is reported consistently, facilitating organisational comparability. 

These metrics help companies track progress, meet regulations, and improve sustainability performance. Businesses operating in the EU must prioritise adherence to the ESRS to avoid financial penalties and protect their reputation. 

This stable compliance framework ensures: 

• Regulatory clarity
• Consistency 
• Alignment with EU sustainability goals.  

It also makes it easier for businesses to meet reporting requirements.

The phased implementation of the Corporate Sustainability Reporting Directive is as follows: 

• From FY 2024 (Reporting in 2025): Large public-interest entities with over 500 employees. 
• From FY 2025 (Reporting in 2026): Large companies meeting at least two of these criteria: 
• A balance sheet total exceeding €25 million. 
• Net turnover exceeding €50 million. 
• An average workforce of more than 250 employees. 
• From FY 2026 (Reporting in 2027): Listed small and medium-sized enterprises (SMEs) with an option to defer compliance until 2028. 
• From FY 2028 (Reporting in 2029): Non-EU parent companies with significant operations in the EU.

These reporting requirements also encourage businesses to integrate sustainability into their operations. For example, a manufacturing company might report on its efforts to transition to renewable energy sources alongside its governance practices to oversee this transition. 

Adhering to the CSRD allows companies to identify operational inefficiencies, uncover opportunities for cost savings, and build stronger relationships with ESG-focused investors. 

With the CSRD setting new transparency standards, businesses must rethink how they track, manage, and report sustainability data.  

A Deloitte 2024 report notes that many firms without pre-existing sustainability tracking fail their first CSRD audit due to inconsistent reporting. 

Turning CSRD compliance into a strategic advantage 

Rather than viewing regulatory updates as a burden, businesses can use them as a tool to build credibility and improve transparency.  

The CSRD, for example, is more than a reporting requirement but an opportunity for companies to:  

• Showcase leadership in sustainability
• Attract investors
• Strengthen stakeholder trust 

For businesses operating in Belgium, the transposition of the CSRD into national law underscores the urgency of preparation.  

A recent example is Siemens, which aligned early with the EU’s sustainability regulations. Their proactive CSRD compliance helped secure green investment funding and strengthened relationships with regulatory bodies.

Closing thoughts 

Tools like Mobilexpense simplify compliance by automating reporting and providing clear data for regulatory requirements. 

Aligning expense compliance with sustainability goals helps businesses succeed in a more regulated and transparent market. Investing in the right tools now ensures companies stay compliant, efficient, and competitive in the future. 

With phased reporting requirements that started in 2024, organisations must act now to align their systems and processes with ESRS standards.