EU Corporate Sustainability Reporting Directive (CSRD) – Mid-2022 update
This blog post covers the mid-2022 updates on the CSRD. You can find our earlier coverage of the CSRD here. On June 21st of, 2022, the Council and the European Parliament reached a provisional political agreement on the CSRD [1]. On June 30th, 2022, the Council released another document [2] with additional information related to the topic.
Motivation – Why the CSRD?
The press release also indicates the motivation to implement the CSRD: “The proposal aims to address shortcomings in the existing rules on disclosure of non-financial information, which was of insufficient quality to allow it to be properly taken into account by investors. Such shortcomings hinder the transition to a sustainable economy.” [1]
What are the companies that fall in the scope of the CSRD?
- Large public-interest companies (see [2] p. 12ff.)
- All large companies
- All listed companies (except listed micro-enterprises)
- Non-EU companies with branches or subsidiaries in the EU if they cross a certain threshold (€150 million net-turnover, see [2] p. 13ff).
- Non-EU companies will have to report to a separate set of standards that exclude certain reporting areas like impact focus and reporting on risks.
- For listed SMEs, there is the option to use a more specific, more proportionate standard, and they can opt-out for two years after entry into the application.
When will companies have to report?
With the press release for adopting the CSRD, new timelines have been published to give companies more time to adapt to the upcoming changes.
| Category | First Report under CSRD | based on data (FY) |
| Already reporting under NFRD | 2025 | 2024 |
| Other large companies | 2026 | 2025 |
| Listed-SMEs | 2027 | 2026 |
| Non-EU Companies* | 2029 | 2028 |
*Non-EU companies with branches/subsidiaries
Additional requirements
The non-financial reporting is a part of the management report. However, article 19a(1) states, “This information shall be clearly identifiable within the management report, through a dedicated section of the management report.”
Third-party audits of the non-financial information reported by companies are becoming mandatory under CSRD by accredited independent auditors or certifiers. That is to ensure that the sustainability information complies with the certification standards. In addition, reporting by non-European companies that fall under the CSRD must also be certified.
The CSRD comes with the requirement for improved accessibility of sustainability information. One aspect is the requirement to publish sustainability information in a dedicated section of the management report. Another requirement is digital tagging.
What is next?
The press release states that the provisional agreement is subject to approval by the Council and the European Parliament.
In parallel, the EFRAG is developing the European Sustainability Reporting Standard (ESRS – read more here) that will be the framework corporates have to use when reporting under CSRD.
Further Reading
[1] Press release by the European Council:
[2] The European Council released additional information on the CSRD on June 30th, 2022:
https://www.consilium.europa.eu/media/57644/st10835-xx22.pdf
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