The Corporate Sustainability Reporting Directive (CSRD) will lead to an expansion of sustainability reporting for companies in the EU and will gradually become mandatory for large companies. It came into force in January 2023 and thus replaces the NFRD (Nonfinancial Reporting Directive) that has been in force until now. The CSRD reporting obligation will be introduced in a phased model starting in 2024 and will initially affect all companies that are already covered by the NFRD.
The mandatory structure and scope of sustainability reports are described in the European Sustainability Reporting Standards (ESRS), which were developed by EFRAG based on the NFRD and GRI (Global Reporting Initiative). Based on a materiality analysis of your business activities, the scope of the report is limited to the areas of your environmental impacts and risks that are material to you.
The sustainability report must be published exclusively together with the management report; any other form of sustainability reporting does not release your company from its reporting obligation. The sustainability report must be certified by an auditor, whereby a limited assurance is sufficient for the first reporting year, which is successively increased to a reasonable assurance.
How are the ESRS structured?
There are two cross-cutting European Sustainability Reporting Standards (ESRS) and ten thematic, industry-independent ESRS standards.
The cross-cutting ESRS standards cover the general requirements, the reporting period, materiality analysis and reporting requirements.
The 10 thematic ESRS are divided into three areas: environmental, social and governance. A double materiality analysis is used to determine your company's reporting obligations.
Is your company affected by the CSRD?
All large corporations domiciled in Europe will gradually be included in the reporting obligation under the CSRD. This will affect around 50,000 companies, in Austria it is assumed that around 2,000 companies will report under the CSRD.
From Jan. 1, 2024 - reporting year 2024 with a deadline of 2025
First and foremost, all listed, large companies that are also already covered by the NFRD must report in accordance with the CSRD and ESRS.
The following criteria apply:
From Jan. 1, 2025 - reporting year 2025 with a deadline of 2026.
As of Jan. 1, 2025, all large corporations must submit a sustainability report in accordance with the CSRD.
2 of the following 3 criteria must be met:
From Jan. 1, 2026 - reporting year 2026 with deadline 2027.
All listed SMEs will have to submit a sustainability report in accordance with CSRD from January 2026. For them, EFRAG will develop additional reporting standards to be published under the name LSME ESRS.
How are you preparing for the CSRD and ESRS?
A structured approach and a roadmap for the implementation of sustainability reporting tailored to your company will lead you step by step to the topic of CSRD and ESRS. In the run-up, your previous sustainability efforts and management reports are analyzed in order to divide the further data collection into must-haves and should-haves and to start the materiality analysis in the next step.
How do I successfully manage the CSRD?
The CSRD defines the sustainability reporting process in the European Sustainability Reporting Standards (ESRS). The ESRS require a double materiality analysis to identify your company's environmental and social impacts, as well as environmental and social risks. After the materiality analysis, you will know which topic-specific chapters and indicators of the ESRS are relevant and reportable for you.
Are SMEs exempt from reporting requirements under the CSRD?
Companies with fewer than 250 employees, sales of less than 50 million euros and total assets of less than 25 million euros that are not listed on a stock exchange are initially exempt from the reporting obligation under the CSRD. However, requests from large companies for sustainability reports will increase for these companies as well. To provide guidance aligned with the CSRD and ESRS, EFRAG will publish a VSME (Voluntary) Standard.