What is CSRD?
Corporate Sustainability Reporting Directive
The EU regulation requiring large companies and listed SMEs to report sustainability information under mandatory European Sustainability Reporting Standards (ESRS), with double materiality and limited assurance from the first cycle.
Definition
CSRD (EU Directive 2022/2464) is the European Union regulation that requires large companies and listed SMEs to report sustainability information under mandatory European Sustainability Reporting Standards (ESRS). It replaces the Non-Financial Reporting Directive (NFRD), significantly expands reporting scope, and introduces a double materiality framework. Sustainability information must be subject to limited assurance from the first reporting cycle.
Key facts at a glance
Who is in scope?
CSRD scope is determined by entity size, listing status, and — for non-EU companies — turnover within the EU. The criteria below determine which entities must report.
Meet at least two of: 250+ employees, EUR 40M+ net turnover, EUR 20M+ balance sheet total.
Smaller listed companies with an opt-out available until FY2028.
EUR 150M+ net turnover in the EU with at least one EU subsidiary or branch exceeding the large company threshold.
Reporting timeline
Frequently asked questions
What is CSRD?
CSRD stands for Corporate Sustainability Reporting Directive (EU Directive 2022/2464). It is the European Union regulation that requires large companies and listed SMEs to report sustainability information under mandatory European Sustainability Reporting Standards (ESRS). It replaces the NFRD and applies a double materiality framework — companies must assess both their impact on sustainability matters and the financial impact of sustainability matters on the company.
Who is in scope for CSRD?
CSRD applies to: (1) Large EU companies meeting two of three criteria — 250+ employees, EUR 40M+ turnover, EUR 20M+ balance sheet — reporting from FY2024. (2) Listed SMEs on EU regulated markets reporting from FY2026 (with opt-out to FY2028). (3) Non-EU parent companies with significant EU activity (EUR 150M+ net turnover in EU and at least one EU subsidiary or branch) reporting from FY2028.
What is double materiality under CSRD?
Double materiality requires companies to assess sustainability topics from two perspectives: impact materiality (how the company affects people and the environment through its operations and value chain) and financial materiality (how sustainability risks and opportunities affect the company's financial performance and prospects). Both assessments must be conducted independently and a topic can be material from one or both perspectives.
What are ESRS under CSRD?
ESRS (European Sustainability Reporting Standards) are the mandatory standards under which companies report under CSRD. They are developed by EFRAG and adopted by the European Commission. The first set includes ESRS 1 (general requirements), ESRS 2 (general disclosures), and topic-specific standards covering environment (E1–E5), social (S1–S4), and governance (G1). Disclosure requirements within topic-specific standards are subject to the company's double materiality assessment.
What assurance is required under CSRD?
CSRD requires limited assurance on sustainability information from the first reporting cycle. The European Commission has a mandate to develop standards for reasonable assurance by 2028, with a trajectory toward reasonable assurance as the long-term standard. Assurance must be provided by an accredited independent assurance provider, which in most member states will be the statutory auditor.
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