Corporate Sustainability Reporting Directive (CSRD) – What businesses need to know

The Corporate Sustainability Reporting Directive (CSRD) is a European Union directive designed to increase transparency and accountability in sustainability reporting. It replaces the Non-Financial Reporting Directive (NFRD) and significantly broadens the scope, requiring more companies to disclose their environmental, social and governance (ESG) performance.

What is the Corporate Sustainability Reporting Directive (CSRD)?

The CSRD is part of the EU’s broader Green Deal and sustainable finance agenda. Its goal? To ensure stakeholders – including investors, consumers, and policymakers – have access to consistent, comparable and reliable sustainability information.

While sustainability reporting was once limited to large public companies, the CSRD shifts the responsibility to a much broader range of businesses. This marks a cultural shift in corporate transparency, embedding sustainability at the core of business accountability.

Who does the CSRD apply to?

From 2024 onwards, the CSRD will apply in stages to:

• All large companies in the EU (including listed and non-listed)
• Certain non-EU companies with significant activity in the EU
• SMEs listed on EU-regulated markets (with some reporting flexibility)

Companies must comply if they meet at least two of the following:

• More than 250 employees
• Net turnover > €40 million
• Total assets > €20 million

This means thousands of companies across Europe – and even beyond – will be affected. The CSRD also impacts supply chains, as large reporting entities may request ESG data from their partners and suppliers.

Key CSRD reporting requirements

Under the CSRD, companies must:

• Report in line with European Sustainability Reporting Standards (ESRS)
• Disclose both qualitative and quantitative ESG data
• Include sustainability reporting in their annual management report
• Ensure information is audited (limited assurance)

The CSRD goes further than simple disclosure. It requires detailed insights into:

• Climate change mitigation and adaptation
• Biodiversity and ecosystems
• Water and marine resources
• Circular economy practices
• Workers’ rights and diversity
• Governance and anti-corruption measures

The principle of double materiality is central: companies must report how ESG issues affect them, and how they in turn impact the environment and society. This holistic view makes the CSRD one of the most ambitious sustainability disclosure mandates worldwide.

When does the CSRD come into force?

Implementation is phased:

• 2024: Companies already under the NFRD (approx. 11,000 entities)
• 2025: Large companies not previously subject to NFRD (estimated 38,000)
• 2026: Listed SMEs, small credit institutions, and captive insurers

By 2028, the CSRD will impact around 50,000 companies in total. Early preparation is essential to avoid compliance risks and to capitalise on reputational and investor benefits.

Related terms often searched

If you’re researching the CSRD, you may also come across related terms, including:

• CSRD Directive
• CSRD reporting requirements
• Corporate Sustainability Reporting Directive Netherlands
• European Sustainability Reporting Standards (ESRS)
• CSRD EUR-Lex (the official legislative text)
• Corporate sustainability due diligence directive
• CSRD reporting standards and templates

These keywords are all linked to the evolving EU sustainability landscape and form the basis of modern ESG regulation.

Challenges companies may face

Many organisations underestimate the complexity of sustainability reporting. Common challenges include:

• Identifying relevant ESG indicators
• Collecting reliable, auditable data
• Coordinating cross-departmental input
• Translating sustainability performance into financial risk metrics
• Aligning with the ESRS taxonomy and terminology

Moreover, the CSRD places a strong emphasis on forward-looking metrics and scenario planning. Businesses must shift from historic data to forecasting ESG risks and opportunities.

How FirmC helps companies comply with the CSRD

At FirmC, we combine legal, financial and sustainability expertise to support businesses in navigating complex regulations like the CSRD. We help you:

• Assess your CSRD readiness
• Identify relevant ESG topics and double materiality impacts
• Structure your sustainability strategy in line with ESRS
• Integrate ESG data into your annual reporting workflows
• Prepare for assurance and auditor review

We also offer practical tools and templates to accelerate compliance. Whether you're a multinational or a first-time reporter, we deliver tailored guidance based on your industry and impact profile.

FirmC believes that CSRD compliance should not be a box-ticking exercise. Done right, it’s a chance to rethink strategy, build stakeholder trust, and drive long-term value creation.

Want to talk CSRD?

Reach out to the FirmC team and get clarity on your obligations and next steps.