Preparing for the Corporate Sustainability Reporting Directive (CSRD)

The CSRD heralds a new pace of regulatory change, and many companies are affected, facing transformative changes intended to strengthen the importance of sustainability issues within their strategy, governance and risk management. So how can business leaders ensure they are prepared, and remain on track to meet this new directive? Our experts have outlined what companies need to do to act now for what’s next. Download our guide below.

Why this directive?

The core objective of the CSRD is to define a standardised and common language for sustainability information, bringing sustainability reporting to the same level as financial reporting. This move takes significant steps toward the goals of the European Green Deal, and to make the EU continent climate-neutral by 2050.

The directive focuses on improving the quality of reported sustainability information, by imposing the use of the European Sustainability Reporting Standards (ESRS) for all companies within the scope of the CSRD.

Which companies/groups are affected?

The directive extends the scope of companies subject to mandatory sustainability reporting obligations, and will apply progressively from 2024 financial year, depending on the CSRD first-time application calendar. Other companies outside the scope will likely face increased pressure to provide sustainability information in view of the obligation to consider the entire value chain. Download our guide below for the full criteria.

What information do companies need to report on?

Companies in the scope of CSRD need to report on their impacts on sustainability matters, and how sustainability matters affect the company's development, performance and position (known as “double materiality”).

Is there compulsory assurance on this reporting?

The sustainability statements and the information they contain will be subject to mandatory assurance carried by a statutory auditor or an independent assurance services provider (IASP), starting with limited assurance with an expected evolution towards reasonable assurance from 2028 (after an assessment to determine the feasibility of reasonable assurance for auditors and companies). This will have to be monitored by the company’s audit committee.

What adoption process has been followed for this directive?

On December 16, 2022, the final text of the Corporate Sustainability Reporting Directive (CSRD) was published in the Official Journal of the European Union (OJEU), replacing the current Non-Financial Reporting Directive (NFRD). This release is the culmination of a process that lasted several months, from the CSRD proposal by the European Commission (EC) in April 2021, to the political agreement reached in June 2022 on a slightly revised version of the initial CSRD proposal and finally the formal adoption by the Parliament and then the Council.

This directive came into force 20 days after its publication in the OJEU, i.e. on January 5, 2023. Member States had 18 months to transpose it into their national law (by July 6, 2024 at the latest). This transposition is the final step to specify the scope of the CSRD requirements and its implementation schedule. 

How Forvis Mazars can help?

Beyond auditing the sustainability statements of its clients, Forvis Mazars is also helping companies of all sizes in the EU and outside of the EU to get ready for their first CSRD-ready reporting.

Our CSRD Readiness consulting services generally comprise three phases: (1) CSRD assessment & planning, (2) CSRD roadmap execution and (3) CSRD reporting. Download our guide below for more details.

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