The Corporate Sustainability Reporting Directive (CSRD) requires companies to report on the impact of corporate activities on the environment, society, and governance (ESG).
This sustainability data must be submitted in a standardized digital format to allow easier checking and comparison in the European single access point database.
The submitted data will then be subject to “limited third-party assurance,” meaning that an auditor will need to evaluate the data.
The CSRD aims to help investors, civil society organizations, consumers, and other stakeholders evaluate the sustainability performance of companies as part of the European Green Deal.
Companies subject to the CSRD will have to report according to European Sustainability Reporting Standards (ESRS). The ESRS is a set of standards, including Cross-cutting standards that set out general provisions applying to sustainability reporting and a set of topical standards to address Environmental (climate change, pollution, waste, and more), Social (Child labor, forced labor, freedom of association and more) and Government (Corruption and bribery, animal welfare, etc.)
The ESRS addresses these four components related to disclosures for each topic:
- Governance
- Strategy
- Impact, risk opportunities
- Matrices and Targets
Who is affected?
Phase 1: 2024
Large companies that are already subject to the Non-Financial Reporting Directive (NFDR). The “first-phase” companies must start reporting according to the CSRD requirements for the 2024 fiscal year, with the report to be published in 2025. Companies need to meet at least two out of three requirements:
- 500 or more employees
- 50 million euro net turnover
- 25 million euro in assets
Phase 2: 2025
This applies to large companies that meet at least two out of three specified requirements:
- 250 or more employees
- 50 million euro in net turnover
- 25 million euro in assets
Phase 3: 2026
From the 1st of January 2026, the CSRD will also be applied to small and medium-sized enterprises (SMEs) listed on EU-regulated markets that exceed at least two of these thresholds :
- more than 10 employees
- more than 700.000 euro in net turnover
- more than 350.000 euro in total assets
CSRD will not cover enterprises with less than 10 employees or below 2 million EUR.
Phase 4: 2028
CSRD will be applied to non-EU-country companies that meet the following requirements:
- a net turnover exceeding 150 million euro in Europe and;
- at least one subsidiary or branch in the EU.
How can we help?
We at ImpactBuying can help your company’s supply chain along the way by:
- Helping to decide which topic to disclose (double materiality) in your supply chain.
- Conducting a thorough risk assessment with our newest software tools.
- Helping collect the data from the suppliers for all the material indicators and matrixes.
- Making sure the data is verified and suitable for reporting.
