Report

Quick Guide: how to report in line with CSRD

Who needs to report and what is covered

If your business is based in the EU, or if you operate in the EU, the requirements under the new Corporate Sustainability Responsibility Directive (CSRD) will likely apply to you. The requirement to report in line with CSRD is being phased in from financial year starting on or after 1 January 2024, beginning with large Public Interest Entities with over 500 employees. The CSRD builds on the requirements of the Non-Financial Reporting Directive (from 2014) to improve the quality and availability of information businesses provide on their sustainability-related risks, opportunities, and impacts. The reporting must be:

• Qualitative and quantitative 

• Forward-looking and retrospective 

• Relate to short-, medium-, and long-term timescales

Under CSRD, 12 European Sustainability Reporting Standards have been developed by the European Financial Reporting Advisory Group (EFRAG), with additional technical advice from other European agencies. The twelve standards are divided into:

• General, cross-cutting standards

• Topical standards

• Sector-specific standards

All businesses must follow the guidance in the first standard and report in line with a second general, cross-cutting standard. You must then undertake a double materiality assessment to determine which of the topical or sector-specific standards you need to report against. For information on conducting a double materiality assessment, see Step 2.

If your assessment finds that climate-related matters are material, your company should report in line with the topical standard focused on climate, ESRS E1. This standard will require you to report on information related to:

• How your company affects climate change, in terms of material positive and negative actual and potential impacts

• Your company’s past, current, and future climate mitigation efforts in line with the Paris Agreement (or an updated international agreement on climate change) and compatible with limiting global warming to 1.5°C

• The plans and capacity of your company to adapt its strategy and business model, in line with the transition to a sustainable economy and to contribute to limiting global warming to 1.5°C

• Any other actions you are taking, and the result of such actions to prevent, mitigate, or remediate actual or potential negative impacts, and to address risks and opportunities

• The nature, type, and extent of your material risks and opportunities arising from your impacts and dependencies on climate change, and how the undertaking manages them

• The financial effects on your company over the short, medium and long term of risks and opportunities arising from the undertaking’s impacts and dependencies on climate change

In practice, this means providing transparency on information such as your company’s:

• Climate change policies and strategies

• Energy consumption

• Scope 1, 2 and 3 footprint (businesses with less than 750 employees may omit Scope 3 data in the first year of disclosure)

• GHG reduction targets and roadmaps

• EU Taxonomy alignment

• Climate-related risks and opportunities

If your double materiality assessment concludes that climate matters are not material and therefore do not need to be reported on, you must still provide a detailed explanation of the conclusions of your materiality assessment in relation to climate change.

The CSRD also includes mandatory assurance for reporting by an independent assurance service provider against sustainability reporting standards. This is to make sure information is accurate and reliable.

Where and when to report

When you begin reporting depends on the size and status of your business. The requirement to report in line with CSRD’s standards will be phased in from 2024-26.

From financial years starting on or after 1 January 2024:

• Large undertakings that are Public Interest Entities (PIEs) exceeding on their balance sheet dates the average number of 500 employees during the financial year

• PIEs that are parent undertakings of a large group exceeding on its balance sheet dates, on a consolidated basis, the average number of 500 employees during the financial year

From financial years starting on or after 1 January 2025:

• Large undertakings other than large undertakings that are PIEs exceeding on their balance sheet dates the average number of 500 employees during the financial year

• Parent undertakings of a large group other than PIEs that are parent undertakings of a large group exceeding on its balance sheet dates, on a consolidated basis, the average number of 500 employees during the financial year

From financial years starting on or after 1 January 2026 (with the option of voluntarily opting out for financial years 2026 and 2027):

• Small- and medium-sized undertakings with securities listed on the EU regulated markets, excluding micro-undertakings

• Small and non-complex institutions, provided they are large undertakings or that they are small- and medium-sized undertakings with securities listed on the EU regulated markets, excluding micro-undertakings

• To captive insurance undertakings and captive reinsurance undertakings, provided they are large undertakings or small- and medium-sized undertakings with securities listed on the EU regulated markets, excluding micro-undertakings

To report in line with CSRD, you can disclose information within a separate sustainability statement or consolidate it within your financial reports. You should explain which of these options you have selected, and if you have consolidated the information, you should confirm that the scope is the same as financial statements. In addition, you should also upload the required information online in HTML format and digitally tag it to enable searching and comparison across the European Single Access Point database.