What is the Corporate Sustainability Reporting Directive (CSRD)?
In recent years, sustainability and environmental sensitivity have been high on the agenda of companies and financial institutions. The European Union (EU) launched CSRD to support and standardize the steps taken in this area.
Fundamentals of CSRD
CSRD is a directive that entered into force on January 5, 2023. It requires companies to publish regular reports on their environmental and social impact activities. Replacing the previous Non-Financial Reporting Directive (NFRD), the CSRD expands the scope of sustainability reporting, affecting around 50,000 companies across Europe.
Relationship of the CSRD with Other EU Regulations
Sectors Covered by CSRD
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Construction
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Agriculture
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Energy
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Finance
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Services
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Production
The CSRD is also closely linked to other important EU regulations on sustainable finance. In particular, the EU Taxonomy helps companies categorize their sustainable activities, while the CSRD determines how these activities should be reported. It is also aligned with regulations governing sustainability-related disclosures of financial products, such as the SFDR.