Corporate Sustainability Reporting (CSRD)

Corporate Sustainability Reporting Directive (CSRD) was formally adopted on 5 January 2023 and represents a major milestone in the European Union’s efforts to promote sustainable business practices. The CSRD is one of the key tools that both facilitates the organisation of tasks and activities and measures the performance of consumers and other relevant stakeholders. The Directive highlights the increasing importance of environmental, social, and governance (ESG) factors in business decision-making processes and stresses the need for greater accountability in corporate sustainability practices.

The CSRD replaces the Non-Financial Reporting Directive (NFRD) and removes its limitations by broadening the scope of companies required to report on their sustainability performance. The Directive applies to all large and listed companies and requires them to disclose information on their social and environmental impacts, governance issues, and sustainability practices.

The implementation of the CSRD aims to promote greater alignment of business activities with the broader objectives of the EU Green Deal, contributing to a more sustainable, inclusive, and environmentally responsible economic landscape.

The CSRD applies to large companies that meet at least two of these three criteria for two consecutive years:

• The company employs an average of more than 250 people.
• The company has a balance sheet total of more than €20 million.
• The company has a net turnover of more than €40 million.

In addition to large companies, the CSRD also applies to small and medium-sized companies whose securities are listed on a regulated market.