CSRD

The Corporate Sustainability Reporting Directive (CSRD) is European Union legislation, effective from 5 January 2023, that requires EU businesses to disclose:

• their environmental and social impacts,
• and how their environmental, social and governance (ESG) actions affect their business.

The goal of the CSRD is to provide clarity that will help investors, analysts, consumers and other stakeholders better evaluate EU companies’ sustainability performance and the related business impacts and risks.

Introduced as part of the European Commission’s Sustainable Finance Package, the CSRD notably expands the scope, sustainability disclosures and reporting requirements of its predecessor, the Non-Financial Reporting Directive (NFRD).

CSRD reporting is based on the concept of double materiality. Organizations must disclose information on how their business activities affect the planet and its people, and how their sustainability goals, measures and risks impact the business’s financial health.

All CSRD disclosures must be publicly available, and the CSRD mandates third-party auditing of all disclosures for accuracy and completeness.