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Article
Sustainability Reporting

CSRD 2024: Revision to be implemented from 1 January 2024 onwards

March 18, 2024

On 21 June 2022, the European Parliament and Council reached a provisional agreement to implement the Corporate Sustainability Reporting Directive (CSRD) with a phase-in period for different entities from the year 2024 to 2026.

This comes as major focus is cast on ESG reporting standards in the EU and as part of a wider package of transformations that set in motion the European Green Deal. Succeeding its predecessor, the 2014 Non-Financial Reporting Directive (NFRD), the CSRD was proposed as a way to address the shortcomings of the existing EU sustainability reporting framework.

CSRD 2024: What are the new requirements?

The European Sustainability Reporting Standards (ESRS) exposure drafts are still under public consultation until 8 August 2022. Until then, affected companies continue to report according to NFRD requirements while awaiting the final directive on sustainability reporting requirements.

However, some disclosure requirements are already clear from Directive 2014/96/EU and the existing exposure drafts. Environmental and social indicators including employee-related topics, as well as human rights and integrity-related issues remain as minimum disclosures. But these reporting areas will be revised with more detailed requirements.

In the new revision to the directive, additional emphasis is placed on corporate governance information as it relates to the role of management bodies, their composition, and the enterprise risk management framework. Another area of focus is how sustainability is embedded in a company’s strategy and management approaches.

The directive follows the double materiality concept. The impact of a company’s operations on sustainability is thereby just as important as the impact of sustainability issues.

One firm requirement is the verification of disclosures by an independent auditor. This will make greenwashing a lot harder for companies, in line with the directive’s aim to “ensure the reliability of data and avoid greenwashing” - problems identified in a review of the NFRD. In practice, the NFRD allows gaps in material information including climate- and biodiversity-related information. The more comprehensive CSRD is set to replace the NFRD starting 1 January 2024.

Public companies will be required to ensure that sustainability data is available in line with XBRL format. To that end, a XBRL taxonomy is being developed for digital tagging purposes. The reporting format is an electronic XHTML and should follow the XBRL taxonomy to enable easy access to data and machine readability. This means that disclosures have to be digitally available and tagged to taxonomy categories, which are still being finalised.

CSRD 2024: Who will be affected?

The new rules will affect companies already subject to the NFRD from 1 January 2024. NFRD-exempt companies with 250 or more employees will be affected from 1 January 2025, and SMEs from 1 January 2026. Non-European companies with operational footprint in the EU with a net turnover of €150
a million or more must also disclose and verify their ESG impacts.

The revised directive will complement the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation. It will thereby create a coherent reporting ecosystem that can support the European Green Deal.

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  • We conduct an assessment of your reporting quality and identify the disclosures and the right reporting format that you need to comply with the CSRD.
  • We explain the CSRD requirements that could apply to you and advise you on aligning with the supporting legislation such as the EU Taxonomy and TCFD recommendations.
  • We help you complete the information requests from regulators or investors and guarantee the protection of business-critical information.
  • We automate the collection of relevant data internally and simplify the process across the supply chain, increasing efficiency and saving effort.
  • We automatically generate CSRD-compliant reports and help you track your progress along the standards.

Resources

Your ESG knowledge hub

Check out our latest guides and articles to help you in your sustainability journey

CSRD Super Guide
Everything you ever wanted to know about Double Materiality, Data Collection, Reporting under the ESRS and how we help you.

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What You Need to Know About The EU’s CBAM
Learn about CBAM's impact on EU businesses and global suppliers. Ensure compliance with key insights
What You Need to Know About the ESRS xBRL Taxonomy
Learn about ESRS xBRL Taxonomy for CSRD compliance and its impact on reporting format and presentation.

Start your sustainability journey

Talk to our experts to understand how Daato fits your ESG use cases.

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Resources

Your ESG knowledge hub

Check out our latest guides and articles to help you in your sustainability journey

CSRD Super Guide
Everything you ever wanted to know about Double Materiality, Data Collection, Reporting under the ESRS and how we help you.

Blog title heading will go here

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim...

Blog title heading will go here

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim...
What You Need to Know About The EU’s CBAM
Learn about CBAM's impact on EU businesses and global suppliers. Ensure compliance with key insights
What You Need to Know About the ESRS xBRL Taxonomy
Learn about ESRS xBRL Taxonomy for CSRD compliance and its impact on reporting format and presentation.

Start your sustainability journey

Talk to our experts to understand how Daato fits your ESG use cases.