CSRD Explained: What We Know Now

New to CSRD? Here’s What You Need to Know

With ongoing discussions about the Omnibus proposal, there is uncertainty about its impact on the CSRD. Before speculating on what might change, let’s first focus on what we know now: 

📌 What is the CSRD?

📌 Who needs to report and by when?

📌 What are the exemptions?

📌 Which standards apply?

Understanding the current requirements is essential for businesses preparing to report.

What is the CSRD?

What is the CSRD? The Corporate Sustainability Reporting Directive (CSRD) is an EU law that requires >50,000 firms to disclose environmental and social risks, opportunities, and impacts.

Its purpose is to promote accountability, transparency, and sustainable investments. CSRD is part of the European Green Deal’s aim for climate neutrality by 2050.

The CSRD took effect on 5 January 2023, with the first reports due in 2025.

Who needs to report and by when?

The CSRD applies to both small and large companies, as well as EU and Non-EU companies. See the table below for the overview and thresholds and timing.

What are the exemptions?

Listed SMEs: Can opt-out until 2028

Subsidiaries:

• Consolidated sustainability report by parent company covering all subsidiaries.

• Artificial Consolidation is allowed until 2030, enabling companies to consolidate information from all subsidiaries in scope.

Micro-enterprises: Not required to report

🚨 No exemption for large companies meeting CSRD criteria!

Important:

If an EU subsidiary subject to CSRD applies a reporting exemption, it must still include in its management report: a statement of exemption, the parent company’s name and address, and web links to the parent’s sustainability report and assurance opinion.

Which standards apply?

There are three types of reporting standards to be applied, depending on the nature of the company:

Important:

• CSRD must be reported in a dedicated section of the management report.

• Independent assurance is required. The CSRD requirements begin with limited assurance and expand to reasonable assurance at a later date.

Is your company in scope of the EU’s CSRD?

If you're unsure where your company stands or need help navigating this new regulation, I’m here to help!

What about the Omnibus proposal? Stay tuned for my next post where I break it all down!

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