A closer look at CSRD regulations and their impact on businesses.
The Corporate Sustainability Reporting Directive, which aims to strengthen the requirements of the NFRD, was introduced by the European Commission in 2021.
The CSRD aims to require companies to publish standardized non-financial reporting that includes the ESG criteria mentioned above.
To expand the number of companies subject to non-financial reporting and to align financial and non-financial information. It provides common indicators that allow companies to be compared and evaluated.
The CSRD was adopted by the EU on November 10, 2022.
It expands the scope of the NFRD. The first reports are expected in 2025 for the 2024 fiscal year.
Given the climate emergency, starting in 2025, the regulation will apply to large companies not currently subject to the NFRD (those with more than 250 employees and/or €40 million in revenue and/or €20 million in total assets), with reports to be published in 2026.
In 2026, SMEs and other listed companies will be affected, with reports published in 2027. SMEs will have until 2028 to comply with the requirement.
- Companies with more than 250 employees, revenue exceeding €40 million, and total assets exceeding €20 million
- SMEs listed on the stock exchange (excluding micro-enterprises with fewer than 10 employees).
- Non-European companies with annual revenue exceeding €150 million within the European market.
What about SMEs? The European Commission intends to adopt tailored standards for certain SMEs: those with total assets exceeding €4 million, revenue exceeding €8 million, and more than 250 employees.
As we saw earlier, the CSRD regulation introduces a new requirement: it now applies to companies with 250 or more employees, who must disclose sustainability-related information.
The regulation will affect an increasing number of companies. Doing nothing for now and waiting until your company is subject to the rules may not be the best approach.
Assessing your ESG criteria today allows you to get ahead of the regulations and offers several advantages:
- Reduce costs: Planning ahead gives you the opportunity to implement actions gradually.
- Simplify implementation: Work that isn't rushed is almost always done better.
- Leverage the benefits of communicating about your ESG criteria and your company's commitment: boost your brand image, win over investors, and more.
To get started and assess your company's CSR maturity regarding climate issues, a Carbon Footprint assessment is a great first step. It makes it easier to identify carbon emission drivers and optimize your impact action plan.
Your company's sustainable performance
