In our latest post we take a brief look at the new Company Sustainability Reporting Directive (CSRD) from Europe.
Introduction
According to EU Parliament press release (10 November 2022) “CSRD will end greenwashing, strengthen the EU’s social market economy and lay the groundwork for sustainability reporting standards at a global level”.
The CSRD is the new EU legislation requiring all large companies to publish regular reports on their environmental and social impact activities. Nearly 50,000 EU companies will have to disclose their impact on the environment to help investors, consumers and other stakeholders evaluate large companies’ non-financial performance and importantly make sustainable choices.
The purpose of the CSRD is to revise and strengthen the existing requirements of the Non-Financial Reporting Directive (NFRD), to ensure that companies report reliable and comparable sustainability information that investors and other stakeholders need.
What companies need to know
Businesses operating in the European Union (EU) will need to publicly disclose information. It is estimated that this will affect circa 49,000 companies as follows:
- From 1 January 2024 large public interest companies (>500 employees) already subject to the non-financial reporting directive (NFRD) will need to report on their environmental and social impact activities, with first reports due in 2025
- From 1 January 2025 large companies that are not presently subject to the non-financial reporting directive (>250 employees and/or Euros 40 million in turnover and/or Euros 20 million in total assets) with reports due in 2026
- From 2026 listed SME’s
- The CSRD will require company sustainability data to be submitted in a standardised digital format in line with the EU Taxonomy
Now is the time that companies should start to identify specific sustainability matters to be disclosed and begin to think about a roadmap and action plan to disclosure within the timeframes. Remember it is as much about the company impact on sustainability and the SDGs as it is the impact that changes have on them – known as “double materiality”.
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