📢 EU CSRD – The Future of ESG Reporting

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 What is the EU CSRD?

The Corporate Sustainability Reporting Directive (CSRD) is the European Union’s new mandatory sustainability reporting framework. It replaces the Non-Financial Reporting Directive (NFRD) and significantly expands ESG disclosure requirements for companies operating in the EU.

Why is the EU CSRD Important?

✅ Mandatory ESG Reporting – Applies to ~50,000 companies, expanding the scope beyond NFRD.
✅ Improved Transparency – Requires detailed disclosures on environmental, social, and governance (ESG) impacts.
✅ Investor & Stakeholder Trust – Helps investors assess corporate sustainability risks and opportunities.
✅ Alignment with Global Standards – Integrates with EU Taxonomy, ISSB, and TCFD frameworks.

Who Must Comply with the CSRD?

The CSRD applies to:
📌 Large EU companies (2 out of 3 criteria: €40M+ turnover, €20M+ assets, 250+ employees).
📌 Non-EU companies generating over €150M in annual revenue in the EU.
📌 Listed SMEs (reporting starts in 2026but with simplified requirements).

What Must Companies Report?

Under the European Sustainability Reporting Standards (ESRS), companies must disclose:
📊 Environmental Impact – Carbon footprint, climate risk, biodiversity impact.
🏢 Social Factors – Labor rights, diversity, supply chain human rights.
📑 Governance– Board diversity, anti-corruption measures, ESG risk management.

CSRD Implementation Timeline

📅 2024 – Large companies already reporting under NFRD must comply.
📅 2025– Other large companies must start reporting.
📅 2026– Listed SMEs & non-EU companies begin reporting.

 9 ESG Reporting Data Points Under CSRD:

1️⃣ Business Model & Strategy – How sustainability risks and opportunities affect business operations.

2️⃣ Governance & Corporate Ethics – Board oversight, executive accountability, and anti-corruption measures.

3️⃣ Materiality Assessment – Identification of sustainability topics that impact financial and environmental performance (double materiality).

4️⃣ Climate Change Impact (Scope 1, 2, and 3 Emissions) – Greenhouse gas (GHG) emissions, climate risks, transition plans (TCFD-aligned).

5️⃣ Biodiversity & Ecosystem Protection– Impact on natural resources, land use, and biodiversity conservation.

6️⃣ Human Rights & Workforce Standards– Fair wages, workplace diversity, labor conditions, and human rights policies.

7️⃣ Social Impact & Community Engagement– Corporate social responsibility (CSR), stakeholder relations, and ethical supply chain management.

8️⃣ Resource Use & Circular Economy– Water consumption, waste management, sustainable product lifecycle strategies.

9️⃣ Financial Materiality & ESG Risk Management – How ESG factors influence company financials and risk assessment.

 📌 Reporting Frameworks for Each Data Point:

• ESRS (European Sustainability Reporting      Standards) – Core standard for CSRD compliance.
• GRI (Global Reporting Initiative)     – Social & environmental disclosure.
• TCFD (Task Force on Climate-Related      Financial Disclosures) – Climate risk assessment.
• ISSB IFRS S1 & S2 –      Investor-focused sustainability reporting.
• EU Taxonomy – Sustainable investment classification.