The Corporate Sustainability Reporting Directive (CSRD) was published in the Official Journal of the European Union (OJEU) on 16 December 2022 - see here.
The CSRD will enter into force 20 days after publication in the OJEU and Member States will then have 18 months to implement the new rules into national law.
The CSRD introduces new requirements for large companies and all companies listed on EU regulated markets, as well as some non-EU companies, to report on sustainability issues, including environmental matters, social and human rights and governance factors. It expands the existing rules under the Non-Financial Reporting Directive (NFRD).
In-scope companies will need to report in accordance with the mandatory European Sustainable Reporting Standards (ESRS) that have been developed by the European Financial Reporting Advisory Group (EFRAG) and which the Commission is currently consulting on internally before adopting the final ESRS as a delegated act in June 2023. See our previous blog post for more information on the ESRS.
Application of the CSRD will be phased in (for financial years starting on or after):
- 1 January 2024 for large public interest entities already subject to the 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 2028 for non-EU companies.
We will be producing a more detailed analysis of the CSRD in January.