What is CSRD?

The Corporate Sustainability Reporting Directive (CSRD) was launched in 2021 by the European Commission. Its goal: harmonise non-financial corporate reporting and lift the consistency and quality of publicly available data. These updated rules cover a broad spectrum of companies and apply from 1 January 2024. The acronym CSRD stands for Corporate Sustainability Reporting Directive — initiated by the EU Commission in April 2021. This new regulatory architecture for sustainability in Europe was officially published in the Official Journal of the EU on 16 December 2022. The directive obliges large companies to publish non-financial disclosures aligned with the European Sustainability Reporting Standards (ESRS). The focus: transparency on risks, opportunities and material impacts in the social, environmental and governance domains. At its core, the directive is meant to deliver on the goals of the European Green Deal — with the aim of climate neutrality by 2050.

ℹ️ Until now, European companies’ non-financial performance reports fell under NFRD (the Non-Financial Reporting Directive). Since NFRD was deemed not future-proof, it’s being replaced by Directive (EU) 2022/2464 — commonly known as “CSRD”.

Who is in scope?

CSRD applies to financial and non-financial companies covered by the Accounting Directive and the Transparency Directive — concretely:

- European companies traded on regulated markets, including listed SMEs; micro companies under the Accounting Directive are excluded.
- Other large European companies, regardless of listing, that exceed at least two of the following three criteria: 250 employees, more than €40m turnover and/or more than €20m total assets.
- Non-European companies with branches or subsidiaries in the EU that generate more than €150m turnover in the EU.

SMEs face a lighter reporting load. The status of European branches and subsidiaries is also taken into account. Non-European companies only have to disclose data on their environmental and social impacts.

For clarity: SMEs that meet the following criteria are in scope:
- 10 employees or fewer;
- balance sheet of €250,000 or less;
- annual turnover of €700,000 or less.

❗️ Important point: if a parent company prepares consolidated reports, its subsidiaries can be exempt from reporting. Even so, the exempt companies still have to provide certain data. Note also: large listed companies can’t use this exemption.

CSRD timeline

As a reminder: CSRD was presented to the European Commission and the European Parliament on 21 April 2021. After publication in the Official Journal of the EU on 16 December 2022, it was transposed into national law in all EU member states by the end of the year.

The directive rolls out in stages on four concrete dates:

- 1 January 2025 (for fiscal year 2024) — applies to European and non-European companies already covered by NFRD.
- 1 January 2026 (for fiscal year 2025) — applies to large European companies and non-European companies listed on European regulated markets that aren’t covered by NFRD.
- 1 January 2027 (for fiscal year 2026) — applies to listed SMEs from European and non-European regions. Important: these SMEs can request an additional two-year deferral if they provide valid reasons.
- 1 January 2028 (for fiscal year 2027) — applies to non-European groups that, via a branch or subsidiary, generate more than €150m turnover in Europe. We’ve summarised the CSRD timeline below in compact form.

Your CSRD checklist

What should you do before 1 January 2026 if your company isn’t yet in NFRD scope?

STEP 1
Run an opportunity and risk analysis on the EU directive and its implications for your company.

STEP 2
Build a CO₂ inventory across Scope 1, 2 and 3.

STEP 3
Set reduction targets for your company.

STEP 4
Expand energy and environmental management systems.

STEP 5
Align data management and control with a recognised reporting standard.

STEP 6
Continuously monitor your main emission sources.