The Corporate Sustainability Reporting Directive (CSRD) kicks in at the start of 2024, applying immediately to most companies already falling under the Non-Financial Reporting Directive (NFRD), and will gradually be phased-in to impact a broader set of large companies and listed small and medium enterprises (SMEs).
Specifically, those captured by the first phase of CSRD requirements have to apply them in 2024 and publish reports encompassing environmental, social and governance (ESG) aspects by 2025.
CSRD replaces NFRD, which has governed reporting since 2018, and from 2024 will have to be adhered to by companies that meet at least two out of three of the following criteria: have 500 employees or more, post a net turnover of at least 40 million euros, or have assets of 20 million euros or more.
It is expected that the number of EU companies that will have to disclose ESG related information will expand from 11,700 to 50,000, as well as around 3,000 US based companies.
From 2025 until 2028, the reporting requirement will gradually include smaller companies, both listed and non-listed, small and non-complex institutions, captive insurance undertakings, and non-EU companies with net turnover above 150 million euros in the EU and at least one subsidiary in the bloc.
The Corporate Sustainability Reporting Directive (CSRD) entered into force on 5 January 2023 and aims to modernize and strengthen rules related to the social and environmental information that companies have to report.
