On 21 April, the European Commission, issued their proposed changes to strengthen the nature and extent of sustainability reporting in the EU over the coming years – the Corporate Sustainability Reporting Directive (CSRD). The proposed changes to sustainability reporting are profound and will be fundamental and directly support the European Commission’s stated objective of directing investment towards more sustainable activities across the European Union. Conor Holland and Colm O'Sé of our Sustainable Futures team outline the implications.

The CSRD proposals significantly enhance the scope of the existing NFRD rules to cover all large undertakings as well as all those listed on EU regulated markets, with the exception of micro-entities. Moreover, in contrast to the NFRD, the CRSD sets out in far greater detail the non-financial information that entities should report. As expected, the CSRD introduces mandated EU sustainability standards, to be prepared by the European Financial Reporting Advisory Group (EFRAG) and adopted via secondary legislation. The standards should be based on the recent recommendations recently made by the EFRAG Task Force on Non-Financial Reporting Standards, with a first set of standards due for adoption by 31 October 2022.

Our brief overview below highlights the key changes and impacts from the CSRD.

    Current EU Directive
Corporate Sustainability Reporting Directive
calendar icon When will it be applicable?

FY 2018

FY 2023

  • FY 2023: first set of Sustainability Reporting Standards (draft standards available mid-2022)
  • FY 2024: second set of Sustainability Reporting Standards
  • Adoption EU-Directive in member states legislation: Dec 1, 2022
building icon To which companies will it be applicable?

Large public interest entities with > 500 employees

Public interest entities are:

  • Listed companies
  • Banks and Insurance companies
  • All large companies meeting at least 2 out 3 criteria:
    • > 250 employees and/or
    • > €40M Turnover and/or
    • > €20M Total Assets
  • Listed companies

Note: small and medium listed companies get an extra 3 years to comply.

graph icon How many companies are subject to the new directive? (EU)


Covering > 75% of total EU companies’ turnover

target icon What is the scope of the reporting requirements?

Companies are to report on:

  • Environmental protection
  • Social responsibility and treatment of employees
  • Respect for human rights
  • Anti-corruption and bribery
  • Diversity on company boards (in terms of age, gender, educational and professional background)

Adding additional requirements on:

  • Double materiality concept: Sustainability risk (incl climate change) affecting the company + Companies’ impact on society and environment
  • Process to select material topics for stakeholders
  • More forward looking information, including targets and progress thereon
  • Disclose information relating to intangibles (social, human and intellectual capital)
  • Reporting in line with Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy Regulation
book icon Is independent 3rd party assurance mandatory?

Non-mandatory (for most countries)

In some countries part of legal audit requirements.

Mandatory – limited level of assurance


  • Integration in Auditor’s Report,
  • Involvement of key audit partner,
  • Scope to include EU Taxonomy and process to identify key relevant  information.
checklist icon Where should companies report?

Included in the Annual Report

Inclusion in the Management Report

format icon In what format should companies report?

Online or PDF version

To be submitted in electronic format
(in XHTML format in accordance with ESEF regulation)

Get in touch

If you have any queries about how the CSRD will affect your business, please contact our Sustainable Futures team below. We'd be delighted to hear from you.

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