CSRD

CSRD replaces the previous directive NFRD and has a significantly broader scope. This means that many more companies are affected than before, regardless of industry. The directive applies primarily to larger companies within the EU but also includes certain smaller companies that are part of corporate groups, as well as companies from outside the EU that conduct business here. Since the rules are being implemented gradually, the concept of CSRD will continue to be used for a long time in connection with implementation, interpretation, and supervision of the reporting.

A central aspect of CSRD is that sustainability information must be presented according to common standards. These are called ESRS and require companies to follow established methods for collecting and reporting data. For this reason, the term CSRD is often used together with expressions such as “reporting in accordance with ESRS,” “sustainability data,” or “double materiality assessments,” which is a method for evaluating both how the business affects the outside world and how external sustainability factors affect the company’s operations.

The information covered may, for example, concern:
• emissions and climate impact
• working conditions and human rights
• supply chains and risks
• corporate governance and accountability processes

The reporting must also be subject to audit in a similar way as financial statements, which means the information must be controllable and structured. In practice, this means that CSRD refers to a system in which sustainability information becomes as formally regulated as financial accounting and reporting.

The purpose of the directive is to increase transparency and provide a more realistic picture of the actual impact companies have. It is also intended to counteract greenwashing and make it easier to compare companies across sectors and countries. CSRD is therefore not a voluntary guideline but a legally binding obligation within the EU.