CSRD

The European Union’s Corporate Sustainability Reporting Directive (CSRD) is a significant regulatory development aimed at enhancing and standardizing the sustainability reporting by companies.

Building on the foundations of the Non-Financial Reporting Directive (NFRD), the CSRD was proposed by the European Commission in April 2021 as part of the EU’s Green Deal and Sustainable Finance Agenda. Its objective is to improve the flow of sustainability information in the global economy, thus making it easier for investors, consumers, policymakers, and other stakeholders to assess the sustainability performance of companies. This, in turn, empowers these stakeholders to make more informed decisions and drive sustainable practices.

The CSRD’s implementation timeline was initially set for reporting in 2024, covering the financial year 2023, for companies already subject to the NFRD. However, due to the complexity of the standards and the need for companies to adopt and prepare legally, there has been an indication of potential delays. New companies are expected to report under the CSRD from 2025 (covering the financial year 2024) and onwards, depending on their size and whether they are currently subject to the NFRD.

The CSRD is a cornerstone of the EU’s agenda for sustainable finance. It is expected to be crucial in moving towards a greener and more sustainable economy by ensuring transparency and accountability and ultimately driving corporate behavior toward sustainability.