The Corporate Sustainability Reporting Directive (CSRD) is the European Union’s new directive for mandatory sustainability reporting. It replaces and expands the older Non-Financial Reporting Directive (NFRD) and is part of a broader push under the European Green Deal.
The goal? To make sure companies to report on:
How environmental and social factors affect their business
How their business affects people and the planet (double materiality)
Who needs to comply and when?
Whether you're based in the EU or not, CSRD likely applies to you soon. Here's when it kicks in:
Reporting Year | Who Must Comply |
2024 | Large listed companies already under NFRD (report in 2025) |
2025 | All other large EU companies (report in 2026) |
2026 | Listed SMEs (report in 2027 — with optional delay to 2028) |
2028 | Non-EU companies with EU revenues > €150 million (report in 2029) |
A large company = at least two of the following:
• 250+ employees
• €40M+ turnover
• €20M+ total assets
What You’ll Need to Report
Under the CSRD, your report must include:
Environmental data (climate, emissions, water, biodiversity)
Social data (labour conditions, human rights, DEI)
Governance practices (ethics, policies, risk management)
Supply/value chain data (transparency beyond Tier 1)
Targets, policies, performance, and proof
Data must be accurate, traceable, and aligned with European Sustainability Reporting Standards (ESRS).
What is Double Materiality?
Double materiality is a major shift in how companies are expected to think about sustainability. Until now, many brands have focused only on financial materiality, so what affects the company. Double materiality requires a company to also consider what your company affects. It requires a wider lens that includes the environment, your supply chain, and the people in it. In short, it means looking at impact in two directions:
Financial materiality
How do sustainability-related risks and opportunities affect your company’s performance, value, and strategy?
Example: A factory flood caused by climate change disrupts your supply chain and increases your costs.
Impact materiality
How does your company’s business model, products, and operations impact the environment and society?
Example: The same factory contributes to water pollution in a vulnerable community.
What to do next
A good first step is to identify when your company will be required to report. The rules are ever changing so it is important to stay up-to-date on the latest updates and releases from the EU.
If you need help creating an action plan, you can find more information on the following article.
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