The draft CSRD presented by the EU Commission in April 2021 profoundly changes the scope and nature of sustainability reporting by companies.
The CSRD significantly expands existing rules on non-financial reporting. All companies listed on an EU-regulated market (with the exception of micro-enterprises) are covered by the new reporting obligation. In addition, all non-capital market oriented companies are covered by the CSRD if they fulfil two of the following three criteria:
- Balance sheet total > 20 million euros
- Net sales > 40 million euros
- Number of employees > 250
It is estimated that this would affect about 50,000 companies in the EU, 15,000 of them in Germany alone.
The new CSR Directive follows a double materiality perspective. This means that companies must record the effect of sustainability aspects on the economic situation of the company. And they must clarify the impact of operations on sustainability aspects. The CSRD requires reporting to include information on:
- Sustainability goals,
- the role of the executive board and the supervisory board
- the company's most significant adverse impacts, and
- intangible resources not yet accounted for.
Partner, EMA & German Head of ESG and Automotive
KPMG AG Wirtschaftsprüfungsgesellschaft
In addition, with the new CSRD there is no longer the possibility to publish non-financial information in a separate non-financial report. In future, sustainability information is to be disclosed exclusively in the management report.
Overview of the main changes
| Current EU Directive
|Corporate Sustainability Reporting Directive|
|Which companies are affected?||
Large companies (>500 employees) of public interest (listed companies, banks and insurance companies)
Companies that meet two of the following three criteria:
|How many companies are affected?||
Circa 50,000 (15,000 in Germany alone)
|What is the scope of the reporting obligations?||
Companies should report on:
Additional reporting obligation on
|Where should companies report?||
In the annual report (also possible separately)
Exclusively in the management report
Learn more in our brochure (in German only)
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