New rules on corporate sustainability reporting: The Corporate Sustainability Reporting Directive
On 5 January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force. It modernises and strengthens the rules concerning the social and environmental information that companies have to report. A broader set of large companies, as well as listed SMEs, will now be required to report on sustainability. Some non-EU companies will also have to report if they generate over EUR 150 million on the EU market.
The new rules will ensure that investors and other stakeholders have access to the information they need to assess the impact of companies on people and the environment and for investors to assess financial risks and opportunities arising from climate change and other sustainability issues. Finally, reporting costs will be reduced for companies over the medium to long term by harmonising the information to be provided.
The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.
Companies subject to the CSRD will have to report according to European Sustainability Reporting Standards (ESRS). The standards are developed in a draft form by the EFRAG, previously known as the European Financial Reporting Advisory Group, an independent body bringing together various different stakeholders.
The first set of ESRS was published in the Official Journal on 22 December 2023 under the form of a delegated regulation. These standards apply to companies under the scope of the CSRD regardless of which sector they operate it. They are tailored to EU policies, while building on and contributing to international standardisation initiatives.
The CSRD also requires assurance on the sustainability information that companies report and will provide for the digital taxonomy of sustainability information.
Policy making timeline
- 7 August 2024Frequently asked questions – Corporate sustainability reportingPublication of the frequently asked questions on the implementation of the EU corporate sustainability reporting rules.
- 2 May 2024Guidance – Corporate sustainability reportingCommission welcomes guidance on interoperability of European and global sustainability reporting standards
- 8 February 2024Legislation – European sustainability reporting standardsPolitical agreement between the European Parliament and the Council on postponing adoption deadlines for certain European Sustainability Reporting Standards (ESRS).
- Show 16 more items
- 15 April 2014Frequently asked questions – Non-financial reportingDisclosure of non-financial and diversity information by large companies and groups