Prepare for Corporate Sustainability Reporting Directive (CSRD)
Plan A assists businesses in anticipating this new EU regulation, which is making waves in the climate disclosure landscape. Understand the key information of this regulation and discover how we can support your company.
The CSRD will mandate 50,000 companies across the EU to follow detailed sustainability reporting standards, corresponding to 75% of all EU companies turnover.
The Corporate Sustainability Reporting Directive (CSRD) is a key rule set by the European Union (EU) for mandatory sustainability reporting. The EU Commission adopted the CSRD in late 2022. The rules will enter into force from 1 January 2024.
The CSRD strengthens the scope and extends the reporting requirements of the Non-Financial Reporting Directive (NFRD). Alongside guidelines for Environmental, Social and Governance (ESG) reporting, the CSRD introduces a reporting framework known as the European Sustainability Reporting Standards (ESRS).
In short, the CSRD is designed to improve disclosure and to help companies determine their sustainability. In this way, it aims to end greenwashing and will make it easier for investors to direct investments towards more sustainable technologies and industries.
To ensure compliance with the mandatory CSRD requirements coming into effect in 2024, position yourself as a pioneer in the corporate landscape by preparing your business now.
Who needs to comply with the CSRD?
01
Large companies (both EU and non-EU subsidiaries)
Companies with over 250 employees and/or with an annual turnover exceeding €50 million and/or with total assets exceeding €25 million are obligated to report under the CSRD.
02
Listed companies, including SMEs (excluding micro-companies)
SMEs have a 3-year time lag before they are required to report under the CSRD.
03
Insurance and credit institutions
Entities within these sectors are subject to CSRD reporting requirements.
04
Non-European companies with subsidiaries in the EU
Non-EU companies with a net turnover of €150 million or more within the EU are obliged to report under the CSRD.
Exemptions
- Subsidiary if the parent company includes subsidiary in its report
- Listed micro companies
- Non-listed SMEs (report on a voluntary basis).
2023
June
Draft ESRS reporting standards published as official Delegated Act.
November
Publish draft for second set of sector-specific reporting standards and standards for SMEs.
2025
January
Companies reporting under the NFRD will be required to report for FY 2024.
2026
January
All large European companies within scope must report for FY 2025.
2027
January
SMEs listed on a regulated market must report for FY 2026.
June
Confirmation of sector-specific ESRS.
2029
January
Large non-European companies with EU branches or subsidiaries must report for FY 2028.
What are CSRD reporting requirements?
Reporting
Environmental
Businesses will have to disclose specific initiatives taken to reduce their environmental footprint, including resource conservation and pollution prevention strategies.
Social responsibility and treatment of employees
This includes everything from employee health and safety protocols to employee benefits and company culture.
Respect for human rights
Companies must discuss their policies on human rights and how they ensure these rights are not violated within their operations.
Anti corruption and bribery
Businesses must explain their strategies to prevent corruption and bribery, including corporate governance measures and ethics training programs.
Diversity on company boards
The CSRD requires companies to provide a detailed breakdown of the diversity of their board members, focusing on aspects such as gender, age, and nationality.
Requirements
Double materiality
Double materiality requires companies to disclose both their sustainability impacts on society and the environment (impact materiality) and the potential financial implications of these sustainability matters (financial materiality).
Third party assurance
The CSRD introduces an EU-wide audit for sustainability reporting, with standards set by the EU Commission. Companies can choose from various assurance providers, with Member States ensuring consistent auditing quality.
Mandatory Scope 3 reporting
Companies are mandated to disclose indirect Scope 3 GHG emissions, encompassing their entire value chain. It requires detailed breakdowns from categories like purchasing, transportation, and investments, aligned with the GHG Protocol Corporate Standard.
Targets and progress reporting
Companies must set and report on their emission reduction targets (e.g Science-based targets).
Align with existing policies
Reporting in line with the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy Regulation. It also recognises the TCFD and GRI.
Reporting in electronic format
CSRD reporting must be included in the management report. It must be xHTML or electronic format in accordance with the European Single Electronic Format (ESEF) regulations and EU Sustainability Taxonomy.
Reporting structure
European Sustainability Reporting Standards (ESRS)
The draft ESRS framework includes general, cross-cutting requirements applicable to all in-scope companies and topical disclosures that may or may not be material to a company.
Cross cutting standards
- ESRS 1: General requirements - sets general principles to be applied when reporting according to ESRS and does not itself set specific disclosure requirements.
- ESRS 2: General disclosures - specifies essential information to be disclosed irrespective of which sustainability matter is being considered. ESRS 2 is mandatory for all companies under the CSRD scope.
Environmental
- ESRS E1: Climate change
- ESRS E2: Pollution
- ESRS E3: Water and marine resources
- ESRS E4: Biodiversity and ecosystems
- ESRS E5: Resources use and economy
Social
- ESRS S1: Own workforce
- ESRS S2: Workers in the value chain
- ESRS S3: Affected communities
- ESRS S4: Consumers and end-users
Governance
- ESRS G1: Business conduct
Plan A ensures you are CSRD compliant
Our mission
Our data-driven, science-backed carbon accounting and ESG reporting supports businesses to stay compliant with reporting legislation requirements such as NFRD (soon to be replaced by CSRD), SFDR, TCFD, SECR, and more.
Support
Our dedicated team of carbon accountants, sustainability experts and customer success specialists enable you to match regulatory changes while demonstrating your commitment to sustainability.
De-risking
To safeguard your reputation and market positioning, it is key to prioritise CSRD compliance with a trusted partner like Plan A. Our software ensures accurate ESG and climate disclosure and will keep you ahead of mandatory reporting requirements
Disclaimer: Until a CSRD template is finalised, companies can continue reporting under our NFRD template throughout 2024 for the 2023 reporting year.
Learning centre
Resources to keep up with CSRD
Comply with climate regulations and stay ahead of the curve
Speak with one our experts to learn how you can use Plan A to report on sustainability.