CSRD (Corporate Sustainability Reporting Directive)
The EU directive 2022/2464 that introduces expanded sustainability reporting requirements for companies above certain thresholds.
The Corporate Sustainability Reporting Directive (CSRD) is an EU directive that significantly expands the scope and depth of sustainability reporting for European companies. It replaces the previous Non-Financial Reporting Directive (NFRD) and broadens the reporting obligation to a much larger group of companies. Reports must be prepared according to the European Sustainability Reporting Standards (ESRS) and are subject to mandatory external audit.
The CSRD introduces the principle of double materiality: companies must report not only on how sustainability issues affect their own business (financial materiality), but also on how their activities impact people and the environment (impact materiality). This represents a fundamental change compared to previous voluntary reporting practices.
The rollout is phased: large public-interest entities with more than 500 employees began reporting for fiscal year 2024. Other large companies follow from 2025, and listed SMEs from 2026. Non-EU companies with significant EU business are also captured from 2028. For many companies, CSRD compliance requires significant investment in data collection, internal processes, and digital tooling.
Legal Basis
Directive (EU) 2022/2464 (CSRD); ESRS (delegated acts of the EU Commission); Directive 2013/34/EU (Accounting Directive)
Practical Example
A medium-sized German automotive supplier with 300 employees is not yet directly subject to CSRD. However, its largest customer — a publicly listed OEM — is required to report on its supply chain sustainability. The supplier is therefore requested to provide structured ESG data on energy consumption, workplace safety incidents, and anti-corruption measures. By implementing a compliance management platform, the company can systematically capture this data and provide it in CSRD-compatible format.