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The Corporate Sustainablity Reporting Directive (CSRD)
The European Union has set itself the ambitious goal of becoming the first continent to be climate neutral. The CSRD is part of the Green Deal and aims to encourage companies to become more sustainable and prepare them for the new economic climate. Although the deadline for implementing the directive has been postponed from 2023 to 2025, it is advisable to start preparing in good time.
The CSRD requires companies in the European Union to assess environmental, social and governance (ESG) risks and provide their stakeholders with information on their sustainability performance. From the 2025 financial year, this information must be included in the management report and assessed by an external party. Timely preparation is required in order to comply with this review.
The following companies must meet the requirements of the CSRD:
For large EU companies (meeting at least two of the following criteria: 250+ employees, a balance sheet total of €20 million or more, a net turnover of €40 million or more) and listed EU SMEs, the CSRD will be directly applicable.
For other EU companies: If you supply companies that are required to report under the CSRD, your company is likely to be affected by the Directive.
For non-EU companies that trade with companies in the EU: For EU companies that must comply with the CSRD, the Directive applies to their entire supply chain.
Although small and medium-sized enterprises are exempt from the CSRD until at least financial year 2026, they will still have to deal with the requirements of their CSRD-compliant supply chain partners.
The European Union has adapted the CSRD in a number of areas. The most important adjustment is the postponement of the implementation date for large companies from 2023 to 2025, giving these companies two more years to prepare for the significant impact of the CSRD. This creates space for companies to develop and implement a sound ESG strategy, identify and monitor ESG risks and report on ESG performance. This ensures compliance with the CSRD and enables companies to manage ESG risks and opportunities appropriately.
Meeting the requirements of the CSRD can be time-consuming and involves various steps, such as identifying stakeholder requirements, analyzing external risks and assessing social and environmental impacts. To ensure a smooth transition, it is advisable to familiarize yourself with the directive as soon as possible in order to understand the necessary measures.
RSM will be happy to support you in complying with the CSRD.
In the first podcast episode of RSM NL, entitled “The Voice of ESG”, CSRD is discussed in more detail.
You can stream the first episode here:
RSM Podcast - Voice of ESG - Episode 1