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Published on: 22. August 2023

The Corporate Sustainability Reporting Directive (CSRD) is a proposal put forth by the European Commission to enhance and update the existing sustainability reporting framework for companies operating within the European Union. The CSRD is intended to further align corporate reporting with sustainable development goals and address gaps in the current reporting landscape.

Key points about the CSRD include:

Expansion of Reporting Scope: The CSRD proposes to extend the scope of reporting requirements beyond the existing Non-Financial Reporting Directive (NFRD), which primarily applied to large public-interest entities. The CSRD aims to cover a broader range of companies, including smaller public companies, and to capture a more comprehensive set of sustainability information.

Harmonisation and Standardisation: The directive seeks to standardise and harmonise sustainability reporting across the EU by introducing specific reporting standards. This is intended to make sustainability information more comparable, reliable, and relevant for stakeholders.

Digital Reporting Format: The CSRD aims to make sustainability reporting more accessible and user-friendly by requiring companies to report sustainability information digitally using the European Single Electronic Format (ESEF), which is already used for financial reporting.

Expanded Reporting Content: The CSRD proposes to introduce reporting on a wider range of sustainability topics, including social and employee matters, environmental matters, anti-corruption, and bribery issues. This is intended to provide a more holistic view of a company’s impact on society and the environment.

Audit and Assurance: The directive proposes to introduce requirements for assurance of sustainability information by independent auditors to enhance the credibility and reliability of reported data.

Timeline: The CSRD was proposed in April 2021 as part of the European Commission’s sustainable finance package. If approved, the directive is expected to be implemented in stages, with larger companies potentially being required to comply with the new reporting rules first.

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