After much delay, the European Parliament and Council reached political agreement on the proposal for a Corporate Sustainability Reporting Directive (CSRD) in yesterday’s trilogue meeting. 

The final wording of the Directive is not yet available, but the European Parliament and the Council issued press releases yesterday evening (see here and here) and the Commission is holding a conference this afternoon (see here). 

We think the final wording of the political agreement will be published by next Wednesday, after having been endorsed by the Council at the next Coreper meeting on 29 June.

So, what do we know about the final wording on the most controversial points?

  • Third country undertakings: The new rules will apply to non-European companies generating a net turnover of EUR 150 million in the EU and which have at least one subsidiary or branch in the EU (this is a new addition to the scope of the original proposal). These companies must provide a report on their environmental, social and governance impacts. The EUR 150 million turnover threshold mirrors that in the proposal for a Corporate Sustainability Due Diligence Directive (CSDDD). Understanding how “turnover” is defined in both Directives is going to be critical to fully understanding the reach of these two, potentially very wide-reaching, frameworks. It also remains to be seen whether the CSDDD will take the same approach as the CSRD on the scoping requirement for the non-EU company to have an EU subsidiary or branch. For more information on the CSRD and CSDDD proposals, see our previous publications here, here and here.
  • A point of process: reports will need to be provided in digital format so that they can feed into the forthcoming European Single Access Point. There will be practical challenges around this for companies outside the EU not subject to this regime.
  • SMEs and proportionality: A handful of SMEs listed on public markets will be subject to lighter reporting standards but there will be an opt-out for SMEs during a transitional period until 2028.
  • Assurance of sustainability: Reporting must be certified by an accredited independent auditor or certifier. The reporting of third country undertakings has be certified by a European auditor or by one established in a third country.


Application of the CSRD will takes place in four stages:

  • 1 January 2024 for large public interest entities already subject to the Non-Financial Reporting Directive (NFRD);
  • 1 January 2025 for organisations that are not presently subject to the NFRD but which fall within the CSRD’s enlarged scope;
  • 1 January 2026 for listed SMEs, small and non-complex credit institutions and captive insurance undertakings;
  • 1 January 2029 for non-EU organisations which fall within the CSRD’s enlarged scope (to be confirmed once the revised final wording of the Directive is available - this was mentioned during the Commission's conference).

Next steps

Although the political negotiations are finally over, there are still a number of procedural steps that need to take place before the final version of the CSRD is published in the Official Journal (OJEU):

  1. The Political Agreement needs to be endorsed by the Council and the European Parliament. In the Council, the agreement will hopefully be endorsed by Coreper next week (possibly on Wednesday 6 July), so that the European Parliament can also endorse it in the coming weeks.
  2. The text will then need to go through a legal-linguist review and be translated into all the official EU languages. This can take 2-3months.
  3. Once ready and translated, the Directive will then be formally adopted by the European Parliament and Council, and published in the OJEU. The Directive will enter into force 20 days after its publication and Member States will need to transpose the CSRD into their national rules 18 months after that.