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What is the CSRD guideline and how do you go about it?

In November 2022, the European Union adopted the Corporate Sustainability Reporting Directive (CSRD). This new directive states that from 2024, more and more companies will be required to report on the impact of their activities on people and the environment. The CSRD directive is central to the European Union's Green Deal and should ensure more transparency about and better quality of sustainability information. In this article, you will read all about this directive is and what it means for companies.

The CSRD directive requires large companies to report on things like CO2 emissions and social capital, as well as the impact you have as a company on biodiversity and human rights violations in the chain. The directive is an extension of the existing European directive around sustainability reporting: the Non-Financial Reporting Directive (NFRD). For unlisted SMEs, it looks at a lighter CSRD variant that is more feasible for them. A company is large if it meets at least two of the three criteria below.

  1. More than 250 employees

  2. More than 50 million euro turnover per year

  3. More than 25 million euro on the balance sheet

What is the CSRD about?

Content of the CSRD includes the following four issues:

  • From the double materiality principle report on:

    • material sustainability developments that lead to potential financial risks for the company, such as resource scarcity, extreme weather and transit risks;

    • ecological and social material impact of the company on people and the environment, such as biodiversity loss and human rights violations in the supply chain;

  • measuring long-term objectives;

  • in addition to financial information on intangibles, the guideline also includes non-financial indicators such as social capital;

  • mandatory 'limited assurance:an external audit.

What does the Omnibus package mean for your CSRD reporting?

Am I still under the obligation? Will I get an extension? And how does this affect my sustainability strategy? The Omnibus package presented by the European Commission 26 February 2025 raised a lot of questions.

All about the Omnibus package and CSRD

"The CSRD provides transparency and standardisation. Companies can be compared on the most relevant non-financial components"

Also listen to our podcast: the story of the CSRD

The CSRD directive requires more and more companies to report on the impact of their activities on nature and society. Preparing for this with your company can feel like a huge task. Like a boring exercise with all sorts of figures and data. From making a stakeholder analysis to double materiality: what does CSRD cover and how do you make sure your organisation is ready? How do you collect the necessary data and how do you get people to buy into an attractive, sustainable story? In this podcast, we talk to Anke Laan, CSRD expert at EY, and Caroline Kroeze, who is working on getting NS ready for the guideline.

The answer to all your questions on the CSRD

Want to know more about the CSRD? Check out the frequently asked questions on CSRD below.

What is a sustainability report?

Just as organisations report financial performance annually, sustainability reporting is about sustainability results achieved. It includes efforts such as reducing CO2 emissions and other sustainability goals. Reports show whether these goals are achieved and how companies are committed to sustainability.

What is the purpose of CSRD?

The aim of the CSRD is to increase transparency on sustainability efforts of companies and organisations, and improve the quality of sustainability information. This enables consumers and customers to compare companies based on their commitment to sustainability.

When will the CSRD come into force?

The CSRD will apply from 1 January 2024 to companies currently covered by the non-financial reporting directive (NFRD) and from 2025 to large companies not currently covered. For listed SMEs, the CSRD will apply from 1 January 2026. Companies should prepare for the directive now, so that they can start collecting the necessary data and setting up the governance structure a year before the start date.

What is covered by the CSRD?

The CSRD includes extensive reporting requirements related to sustainability, including carbon emissions, social capital, biodiversity and human rights violations.

Where does the CSRD come from?

The CSRD is part of the broader European sustainability legislation, known as the Green Deal.

Does the CSRD also apply to SMEs?

For listed SMEs, the CSRD will apply from 1 January 2026. There is a chance of a lighter - and possibly voluntary - version of the CSRD for smaller SMEs.

Is the CSRD mandatory?

From 2024, the CSRD will be mandatory for companies currently covered by the Non-Financial Reporting Directive (NFRD), and from 2025 for large companies that do not currently. For listed SMEs, the CSRD will become mandatory from 1 January 2026.

Does the CSRD also apply to the government?

The current CSRD directive applies only to companies (e.g. BVs and NVs) and not to public bodies.

Does the CSRD also apply to foundations?

Associations and foundations are currently excluded from the CSRD.

Does the CSRD also apply to the healthcare sector?

Yes, since some companies in the healthcare sector have legal forms such as private limited companies or public limited companies, the CSRD also applies to this sector.

What is the difference between CSRD and CSRDD?

The CSRD is about reporting sustainability efforts, while the CSDD requires efforts to identify, prevent and mitigate current risks in the supply chain. However, both require identifying the impact of business activities on people and the environment. Also read this page for the differences with Science Based Targets and steering for social impact.

What is the difference between CSRD and ESRS?

The CSRD is the legislative title, while the European Sustainability Reporting Standards (ESRS) provide guidance on how to actually report according to the CSRD.

Is CSRD a substitute for NFRD?

Yes, the CSRD replaces the NFRD and adds assurance (certainty) from an auditor on non-financial information.

What are the main differences between the CSRD and the current NFRD?

The CSRD extends the scope of reporting to more companies and introduces more detailed and standardised reporting requirements. It also seeks to improve digital reporting by using a single electronic format for sustainability information.

What does dual materiality mean?

Double materiality means that companies must evaluate business and financial risks as well as human and environmental risks.

How do I prepare for CSRD reporting?

It is wise to start by identifying the relevant sustainability information within your organisation. This includes not only collecting data, but also evaluating your existing reporting processes and systems to ensure they meet the new requirements.

What are the possible consequences if I do not meet the CSRD requirements?

This can lead to legal and reputational risks. Companies that fail to report timely and accurately may face fines and penalties from regulatory bodies and may also experience negative reactions from investors, customers and other stakeholders.

What can I do right now?

A good start is participating in one of our CSRD events. There is almost always one on our calendar. For that, check out events.

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