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CSRD Fundamentals
Coming into force in January 2023, the CSRD, or Corporate Sustainability Reporting Directive, is a European directive that provides a methodology for how companies should report their non-financial performance. The aim of this directive is to create a standardized, common language in terms of non-financial reporting to enable better understanding and comparability of organizations' non-financial performance.
What was the background to the creation of the CSRD?
An update of the 2014 Non Financial Reporting Directive (NFRD), it aims to avoid greenwashing, by harmonizing sustainability reporting, but also tobroaden its scope. In fact, more than 50,000 European companiesshould be affected by this directive, according to auditing and consulting firm Ernst Young, compared with 11,000 European companies with the NFRD, according to Entreprises Engagées.
This directive is part of the Green Deal (2019)which can be translated as the Green Deal in French. The Green Deal is a roadmap issued by the European Union with the aim of making Europe carbon neutral by 2050, with an intermediate target of reducing greenhouse gas emissions by 55% by 2030, compared with the 1990s.
As the investments linked to this Green Pact cannot be financed entirely by the public authorities, private investment will be essential in achieving these objectives.
For this, two other regulations have a key role to play:
- The Social Finance Disclosure Regulation (SFDR) imposes sustainability reporting for financial companies, as of 2022. By creating greater transparency, it should, like the CSRD, help to redirect private flows towards more sustainable choices.
- The European Taxonomy classifies economic activities and determines whether an activity is sustainable, based on technical criteria. The taxonomy requires the declaration of certain key performance indicators common to both the CSRD and the SFDR.
Who is concerned and when?
Thresholds Publication Over the financial year Description of the company Number of employees Sales in € Balance sheet in € Large companies already subject to the NFRD 2025 2024 Companies listed on a regulated market in the European Union of companies, insurance companies or credit institutions Over 500Over 40 MSOver 20 M
Thresholds Publication For the financial year Company description Number of employees Sales in € Balance sheet in €
Large companies exceeding two of these thresholds
All groups of companies exceeding these thresholds 2026 2025
All legal forms More than 250 employees More than 40 M More than 20 M
ThresholdsPublicationFor the financial yearCompany descriptionNumber of employeesAC in €Balance sheet in €Small and medium-sized companies included in at least two of these thresholds20272026Public Interest Entities (PIEs), in other words they are:- Listed companies- Insurance companies- Credit institutionsbetween 10 and 250 employeesbetween 0.7 and 40 Mbetween 0.35 and 20 M
ThresholdsPublicationFor the financial yearCompany descriptionNumber of employeesCA in €Balance sheet in €Companies or groups of companies headquartered outside the European Union20292028Subsidiary of a groupBranch of a group-European sales exceeding 150 M Subsidiary within the scope of the CSRDorBranch based in the EU with sales exceeding40 M-.
What content must be declared for CSRD?
Full reporting
1. A brief description of the company's business model and strategy, including :
- The level of resilience of the latter two to risks related to sustainability issues
- Sustainability-related opportunities for the company
- Plans to ensure the compatibility of its business model and strategy with the transition to a sustainable economy in line with the Paris Agreement (i.e. the goal of climate neutrality by 2050)
- How the company's business model and strategy take into account stakeholder interests and the company's impact on sustainability issues.
- How the company has implemented its strategy with regard to sustainability issues
2. A description of the role of the administrative, management and supervisory bodies with regard to sustainability issues, as well as a description of their expertise and skills in exercising this role or the opportunities available to them to acquire this expertise or these skills.
3. A description of the company's policies regarding sustainability issues .
4. Information on the existence of incentive schemes relating to sustainability issues that are offered to members of administrative, management and supervisory bodies.
5. A description of the company's due diligence procedure with regard to sustainability issues and, where applicable, in accordance with EU requirements for companies to carry out such a procedure.
6. A description of the main actual or potential negative impacts related to the company's own activities and value chain, including its products and services, business relationships and supply chain, the measures taken to identify and monitor these impacts, and other negative impacts that the company is required to identify under other EU requirements for companies to conduct due diligence.
7. A description of any measures taken by the company to prevent, mitigate, correct or eliminate actual or potential negative impacts, and the results achieved in this respect.
8. A description of the main risks to the company related to sustainability issues, including a description of the company's main dependencies in this area and a description of how the company manages these risks.
9. Indicators relating to the above points.
- These plans also include the actions taken and the investment and financial plans.
Simplified reporting
1. A brief description of the company's business model and strategy.
2. A description of the company's policies regarding sustainability issues.
3. The company's main actual or potential negative impacts on sustainability issues, and any measures taken to identify, monitor, prevent, mitigate or remedy them.
4. The main risks to the company related to sustainability issues and how the company manages these risks.
5. The key indicators required for the information to be published under points.
