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Overview of the Corporate Sustainability Reporting Directive (CSRD)
Sustainability reporting

The Corporate Sustainability Reporting Directive (CSRD) is a new directive proposed by the European Commission to enhance sustainability reporting across the European Union. It aims to build upon the existing Non-Financial Reporting Directive (NFRD) and plug the gaps in the current reporting framework.

The CSRD seeks to harmonize sustainability reporting practices by introducing a standardized reporting format and expanding reporting requirements. It will apply to large public-interest entities, including listed companies, banks, and insurance companies. The proposed directive also includes provisions for small and medium-sized enterprises (SMEs) to voluntarily comply with the reporting requirements.

The CSRD places a strong emphasis on the quality, reliability, and comparability of sustainability information. It introduces specific reporting standards, such as the use of digital reporting formats, and requires companies to provide information on a broader range of sustainability topics. This includes climate change mitigation and adaptation, biodiversity, resource efficiency, and social matters.

Key requirements of the CSRD

The CSRD introduces several key requirements for companies to meet when reporting on their sustainability performance. These requirements aim to ensure consistency and comparability across reporting entities. Some of the key provisions of the CSRD include:

Extended reporting scope: The CSRD expands the scope of reporting to cover more companies, including SMEs. This will result in a larger number of organizations reporting on their sustainability performance.

Standardized reporting format: The directive introduces a standardized reporting format and enhances the use of digital reporting. This will facilitate the comparability of sustainability information across companies and make it easier for stakeholders to analyze and assess performance.

Inclusion of specific sustainability topics: The CSRD mandates reporting on a broader range of sustainability topics, such as climate change, resource use, and social issues. This will provide stakeholders with a more comprehensive understanding of a company’s sustainability practices.

Assurance of reported information: The directive introduces mandatory external assurance for certain types of sustainability information. This will enhance the credibility and reliability of reported data and provide stakeholders with increased confidence in the accuracy of the information.

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