New EU legislation on sustainability is coming: the CSRD (corporate sustainability reporting directive). Aim is to strengthen and expand the requirements for corporate sustainability reporting. The first companies will have to start working towards compliance in 2024. But eventually, all companies will have to meet these reporting standards. And it takes quite some time to follow the whole procedure to be CSRD-ready. So our advice; don't wait too long, why not start with the CSRD now?
What is CSRD?
The CSRD is focusing on sustainability reporting, driven by a recent EU directive inspired by the European Union's Green Deal. The Green Deal sets the goal for Europe to achieve climate neutrality by 2050, in line with the Paris Agreement established during the UN Climate Conference (COP21) on December 12, 2015. This agreement gained recognition from 194 countries and the European Union.
When to start with the CSRD?
2024: large listed companies or organisations of public interest, such as banks or insurance companies
2025: organisations meeting at least 2 of the following criteria:
- having more than 250 employees
- generating revenue exceeding €50 million
- possessing a balance sheet exceeding €25 million
2026: listed small and medium-sized enterprises (SMEs)
2027: all EU-based companies (with more than 10 employees) and non-EU companies (with revenue exceeding €150 million)
In an indirect manner, the CSRD will also influence companies with fewer than 10 employees, since they are often stakeholders in larger reporting companies, necessitating them to offer insights into their organisation's impact on ESG indicators.