Corporate Sustainability Reporting Directive (CSRD)
Would you like to know more about the requirements of the CSRD, how you can comply with them or how you can benefit from them? Download the 'whitepaper CSRD of RSM'.
What is the CSRD?
The European Union has set a firm ambition: to become the first continent that is climate neutral and fully circular. The CSRD is part of the Green Deal and stimulates companies to become more sustainable and prepare them for the new economy. Although the deadline for the obligation has been postponed from financial year 2023 to financial year 2025, it is wise to start your preparations in time. New developments will be added to this page on a regular basis.
The CSRD obliges companies within the European Union to assess environmental, social and governance (ESG) risks and provide information about their sustainability performance to their stakeholders. This information must be included in the director's report as of the financial year 2025 and must be assessed by an external party. Timely preparation is required in order to comply with this review.
Companies must comply with the requirements of the CSRD if they are large in size, meaning that they meet two of the following three criteria: more than €40 million turnover, over €20 million balance sheet total and/or 250 FTEs. Although small and medium-sized enterprises are exempted from the CSRD at least until the financial year 2026, they will still have to deal with demands from their CSRD-compliant supply chain partners.
Following its consultation round, the European Union has adjusted the CSRD in a number of areas. The most important adjustment is the postponement of the implementation date for large companies from 2023 to 2025. This gives these companies two extra years to prepare for the substantial consequences of the CSRD. This creates room for companies to develop and implement a sound ESG strategy, identify and monitor ESG risks and report ESG performance. This ensures compliance with the CSRD and enables companies to properly manage ESG risks and opportunities.
It can take a lot of time to go through this process. For example, to establish materiality you need to identify the wishes of your stakeholders, analyse external risks and determine your impact on society and the environment. Therefore, starting with a gap analysis as soon as possible to gain insight into the required actions is advised. RSM will gladly support you in the process to comply with the CSRD.