CSRD Compliance: What Companies Need to Know

The Corporate Sustainability Reporting Directive (CSRD) is the EU's landmark regulation that dramatically expands mandatory sustainability reporting, bringing approximately 50,000 companies into scope.

Who Is Affected?

• 2024 (reporting in 2025): Large public-interest entities already subject to NFRD (500+ employees)
• 2025 (reporting in 2026): All large companies meeting two of three criteria: 250+ employees, €50M+ revenue, €25M+ total assets
• 2026 (reporting in 2027): Listed SMEs
• 2028 (reporting in 2029): Non-EU companies with €150M+ net turnover in the EU

What CSRD Requires

CSRD mandates reporting under the European Sustainability Reporting Standards (ESRS), covering environmental, social, and governance pillars. For most companies, ESRS E1 on climate change — including Scope 1, 2, and 3 GHG emissions — is the most material standard.

Double Materiality

Companies must assess impact materiality (how the company affects people and environment) and financial materiality (how sustainability matters affect the company). A topic is material if significant from either perspective.

Digital Reporting: XBRL Tagging

CSRD requires sustainability reports to be machine-readable in inline XBRL (iXBRL) format, enabling automated analysis by regulators and investors.

How to Prepare

1. Conduct a double materiality assessment
2. Map your data landscape and identify gaps
3. Establish a data collection process with evidence documentation
4. Choose purpose-built carbon accounting tools
5. Start with ESRS E1 (climate) — it is material for nearly every company
6. Engage your auditor early