Status: Adopted

Law - European Union - Corporate Sustainability Reporting Directive

Corporate Sustainability Reporting Directive

Summary Table

Obligations
  • Reporting
  • Due Diligence
Normative scope
  • Human Rights
  • Environment
  • Other Social Matters
  • Broad ranging
Value chain scope
  • Own Operations
  • Subsidiaries
  • Direct Suppliers
  • Indirect Suppliers
  • Full Value Chain
Company scope
  • Large Companies
  • SMEs
  • All sectors
Administrative enforcement
  • Monitoring
  • Administrative Sanctions
Judicial enforcement
  • Civil Liability
  • Facilitating Access to Justice
Obligations
  • Reporting
    • Companies must disclose information relating to their operations and management of social and environmental issues
    • Companies must report in line with mandatory EU sustainability reporting standards. Draft standards on EU sustainability reporting will be developed by the European Financial
    • Reporting Advisory Group (EFRAG)- the first set of standards is expected to be adopted by October 2022
    • Companies will need to digitally tag reported information into a European single access point
  • Due Diligence
Normative scope
  • Human Rights
    • Including the treatment of employees
  • Environment
    • The exact scope will be revised by the Parliament in the upcoming evaluation
  • Other Social Matters
    • Anti-corruption and bribery
    • Diversity of the board (including age, gender, educational and professional background)
  • Broad ranging
Value chain scope
  • Own Operations
  • Subsidiaries
    • Covers the EU subsidiaries of non-EU companies
  • Direct Suppliers
  • Indirect Suppliers
    • Due diligence assessments also extend to business partners defined as any party that supplies goods or services directly to the enterprise, but that is not part of the supply chain
  • Full Value Chain
Company scope
  • Large Companies
    • All large companies are covered (eliminates the 500-employee threshold in the NFRD)
  • SMEs
    • Extends the scope to SMES with securities listed on regulated markets
    • Covered SMEs are allowed to report according to standards that are simpler than the standards that will apply for large companies
    • Around 49,000 companies (including large companies) in the EU would be required to comply with the CSRD
  • All sectors
Administrative enforcement
  • Monitoring
    • EU-wide audit (assurance) requirement for reported sustainability information to ensure that reported information is accurate and reliable
    • ‘limited’ rather than a ‘reasonable’ assurance requirement
  • Administrative Sanctions
Judicial enforcement
  • Civil Liability
  • Facilitating Access to Justice

More information

  • The CSRD amends the Non-Financial Reporting Directive (NFRD)
  • The rules introduced by the NFDR remain in force until companies have to apply the new rules of the CSRD.
  • The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.
  • The CSRD will function in line with the Taxonomy Regulation, which sets the conditions an economic activity must meet to qualify as environmentally sustainable
Law

Directive of the European Parliament and of the Council amending Directive 2013/34/EU, Directive 2004/109/EC, Directive 2006/43/EC and Regulation (EU) No 537/2014, as regards corporate sustainability reporting

European Union
December 14, 2022
Area European Law
Reporting
Due diligence
Due diligence and remedy