On the 21st of April 2021, the EU commission announced the adoption of the Corporate Sustainability Reporting Directive (CSRD) in line with the commitment made under the European Green Deal. The CSRD will amend the existing Non-Financial Reporting Directive (NFRD) and will substantially increase reporting requirements on the companies falling within its scope in its efforts to expand the sustainability information for users.

The proposed directive will also entail a dramatic increase in the number of companies subject to the EU sustainability reporting requirements. The NFRD that is currently in place for reporting on sustainability information, covers approximately 11,700 companies and groups across the EU. The CSRD is expected to increase the number of firms subject to EU sustainability reporting requirements to approximately 49,000.

What does the Corporate Sustainability Reporting Directive mean for your organization?

    Current EU Directive
2014/95/EU (NFRD)
Corporate Sustainability Reporting Directive
calendar icon When will it be applicable?

FY 2018

In February 2022 the Council of European Union proposed a delay in the implementation timeline:

  • January 2024: Reporting entities already subject to the NFRD report in 2025 on 2024 data
  • January 2025: Large reporting entities not currently subject to the NFRD report in 2026 on 2025 data
  • January 2026: Listed SMEs, small and non-complex credit institutions and captive insurance entities report in 2027 on 2026 data
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 (listed or non-listed) large companies (two of three criteria met):
  • > 250 employees and/or
  • > €40M Turnover and/or
  • > €20M Total Assets

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: 11,600

NL: 115

49,000 Covering > 75% of total EU companies’ turnover

NL: More than 2000

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)

Overall requirements:

  • Inclusion in the Annual Report
  • External (limited) assurance (as from FY2024)
  • Reporting principles
  • Format and timing

General disclosures:

  • Business model, strategy and policies
  • KPIs and targets (forward looking information)
  • Company and sustainability governance
  • Double materiality assessment and due diligence
  • Risk and opportunity management

Topic-specific disclosures:

  • Environmental (incl. EU Taxonomy)
  • Social
  • Governance
  • Sector-specific standards
book icon Is independent 3rd party assurance mandatory?

Non-mandatory (for most countries)

In some countries part of legal audit requirements (for example in NL under NVCOS 720 requirements).

Mandatory – limited level of assurance including:

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

Included in the Annual Report (for NL companies)

Inclusion in the Management Report

format icon In what format should companies report?

Online or PDF version

To be submitted in electronic format

What are the most important CSRD key action points

The CSRD largely follows the substantive rules of the SFDR and, in addition, uses the EU Taxonomy. All reports and strategic plans arising from the CSRD must be made available in an electronic manner. The five key action points for companies under the new directive are:

1. Reporting based on the double materiality approach
The most significant change with respect to current legislation is the introduction of the double materiality approach, meaning that companies on the one hand have to report on their impact on traditional materiality, for example on the impact of their business on sustainability issues. On the other hand, companies have to report on the risks they run as a result of, for example, climate change or scarcity of raw materials.

2. Formulating long-term ESG targets and policy
Under the CSRD, companies must set clear ESG targets and annually publish their progress on these targets. As a result, the focus on sustainability is no longer optional or voluntary, but mandatory, and must be embedded in the company’s long-term vision and strategy, and must also be applied to its policies.

3. Due diligence for own operations and supply chain
Companies must report and audit the impact of their own operations and production processes. This also applies to the impact of the activities of their supply chain partners. In this way, companies can no longer hide unethical practices or environmental damage

4. Transparency on division of roles and responsibilities
The new EU directive makes it mandatory for companies to clearly identify who and which departments within the organization are responsible for ESG targets and for progress made on achieving the targets. Companies must identify the external parties that are also responsible for realising the ESG efforts.

5. Integrated reporting and mandatory external assurance
Not only does ESG reporting have to meet the standards approved by the European Commission, but the sustainable targets and performance linked to those targets must also be incorporated into the annual report. An independent auditor must then audit the data, as is currently already the procedure for financial performance.

Early compliance with CSRD offers advantages

Early compliance with CSRD also offers many other advantages: new insights arise when companies get a grip on the non-financial indicators relating to corporate activities. For example, new opportunities for cost savings (including energy reduction) and innovations in the production process.

In line with the proposed tightening up of climate ambitions, the EU will introduce more stringent legislation on ESG over the coming years, affecting both large companies and SMEs. Early anticipation of how this affects your own corporate activities and drawing up strategic plans to reduce any negative impact will ensure that your company is more agile and future-proof to face these challenges. Actively focussing on ESG provides you with a competitive advantage over companies that have no reporting obligation yet.

In addition, early compliance with ESG reporting in the long term offers scope for streamlining your own production and supply chain from a sustainability point of view. In this way, you can enter into strategic partnerships and identify future bottlenecks at an early stage. This guarantees the continuity of the supply chain at the time the directives enter into force.

A challenge

Developing the right ESG reporting is a serious challenge for many organizations. The amount of ESG metrics is vast and varies by industry, company size and complexity. In addition, there are many different measurement and reporting frameworks worldwide. We help you prepare an ESG report that meets the requirements of the CSRD, including the EU Taxonomy and the Task Force on Climate Related Financial Disclosures (TCFD).


The Corporate Sustainability Reporting Directive (CSRD) requires companies to report on the impact of corporate activities on the environment and society, and requires the audit (assurance) of reported information.

The purpose of the Green Deal is to make Europe the first climate-neutral continent by 2050. It is the EU’s response to achieving the targets laid down in the 2015 Paris Agreement. The EU’s action package ‘Fit for 55’ works towards the first step: reducing net emissions by at least 55% by 2030.

The EU Taxonomy is a classification system that can be used to indicate if a financial product or investment is environmentally sustainable. Its purpose is to make it easier for investors to opt for sustainable investments.

The Non-Financial Reporting Directive (NFRD) is the predecessor of the CSRD and has a more limited scope. For example, the NFRD currently imposes an obligation on some one hundred companies in the Netherlands to report on ESG factors. In the future, the CSRD is expected to impose this obligation on some thousands of companies.

Under the Sustainable Finance Disclosure Regulation (SFDR), asset managers have to disclose their ESG risks, policies and results. Its purpose is to make European clients aware of the impact of investments and to make it easier to compare financial products in terms of sustainability.

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