The Corporate Sustainability Reporting Directive (CSRD) is a European regulation aimed at enhancing and harmonizing sustainability reporting by large listed companies and other large entities within the European Union (EU). The CSRD aims to increase transparency and comparability of sustainability information so that investors, policymakers, and stakeholders can make better-informed decisions regarding the sustainability performance of companies.
Some key features and objectives of the CSRD include:
Expansion of reporting obligations: The CSRD expands reporting obligations to cover more entities than the previous directive, the Non-Financial Reporting Directive (NFRD). It will also apply to large non-listed companies and public-interest entities (PIEs) designated as such by member states.
Harmonization of reporting requirements: The CSRD seeks to establish common reporting requirements, including the obligation to report on a wide range of sustainability issues such as environmental performance, social impact, and governance practices. This will ensure greater consistency and comparability in the reported information.
Digital reporting: The CSRD places an emphasis on digital reporting and mandates requirements for the presentation of sustainability information in digital reports to make the information more accessible to the public.
Enhanced assurance: The proposal also includes provisions related to enhanced assurance requirements, meaning that certain sustainability information will require assurance.
The CSRD is intended to replace the NFRD and is expected to contribute to greater transparency and accountability in sustainability within the EU. It will encourage organizations to take sustainability factors seriously and provide stakeholders with more reliable information to support decisions that consider the long-term impact of business activities on the environment and society. The legislative process for the CSRD is underway, and the final text and implementation details may vary pending approval by EU institutions.
