Corporate Sustainability Reporting Directive (CSRD)

What is the CSRD?

The European Union has set a firm ambition: to become the first continent that is climate neutral and fully circular. The CSRD is part of the Green Deal and stimulates companies to become more sustainable and prepare them for the new economy. Although the deadline for the obligation has been postponed from financial year 2023 to financial year 2025, it is wise to start your preparations in time. New developments will be added to this page on a regular basis.

The CSRD obliges companies within the European Union to assess environmental, social and governance (ESG) risks and provide information about their sustainability performance to their stakeholders. This information must be included in the director's report as of the financial year 2025 and must be assessed by an external party. Timely preparation is required in order to comply with this review.

In our Whitepaper, we explain what the CSRD entails and its impact on companies. We then describe the opportunities the CSRD presents and explain how a company can prepare for the reporting requirement. Finally, we conclude with some of the challenges that may arise when implementing the CSRD and share our more practical experiences and look ahead to 2024.

What does the CSRD mean for you?

Large companies are subject to the CSRD as of 2025. This means that information as required by the CSRD must be included in the 2025 board report and published in 2026. A company is large if it meets at least two of the three criteria below, such as a) more than 250 employees, b) more than 50 million euros in annual sales, and/or c) more than 25 million euros in assets on its balance sheet. Since reporting is required for the fiscal year 2025, large companies will need to be ready with preparations for the CSRD by January 1, 2025. Many companies will need practical support. It is therefore wise to start understanding your company's situation and the steps you still need to take to report in accordance with the CSRD as soon as possible.

The CSRD indirectly impacts medium and small enterprises. They are exempt from the CSRD until (at least) fiscal year 2026. However, because of chain effects, they will have to deal with the CSRD. Large companies will be required to report on their own value chain. Because many small and medium-sized companies are suppliers and/or buyers of larger companies, they will face increased ESG data requests regarding, for example, operations and activities. As a result, medium and smaller companies will have to act faster than the law requires of them.

It can take a long time to go through this process. For example, to determine materiality, you need to identify the requirements of your stakeholders, analyze external risks and define your impact on society and the environment. It is therefore wise to start as soon as possible with a gap analysis so that you can gain insight into the steps you still need to take. RSM is happy to support you in the process of complying with the CSRD.

Want to learn more about the requirements of the CSRD, how to comply with them and how to benefit from them?

CSRD - From obligation to opportunity?

Do you have questions about the CSRD or what it means to you? If so, please contact: