CSRD Timeline – How to Prepare for Sustainability Reporting?

What is CSRD?

Corporate Sustainability Reporting Directive (CSRD) is a directive set by the European Union requiring companies to report on their sustainability practices. The CSRD timeline outlines the phased implementation of these reporting requirements, with large companies being the first to comply, followed by listed SMEs and other affected businesses in subsequent years. CSRD strengthens and standardizes sustainability reporting, introducing broader and more detailed requirements compared to the previous Non-Financial Reporting Directive (NFRD).

The purpose of CSRD is to increase corporate accountability and transparency and to ensure that stakeholders have access to consistently reported data on corporate sustainability impacts and risks.

CSRD Reporting Timeline – When is Your Company Required to Report?

CSRD will be implemented in phases as follows:

• From the 2024 financial year (reporting in 2025): Companies are already required to report under NFRD (publicly listed companies and groups with over 500 employees).
• From the 2025 financial year (reporting in 2026): All large companies meeting at least two of the following criteria:
  • More than 250 employees
  • Over €25 million in assets
  • Over €50 million in revenue
• From the 2026 financial year (reporting in 2027): Listed small and medium-sized enterprises (SMEs), excluding micro-enterprises.
• From the 2028 financial year (reporting in 2029): Non-EU companies with more than €150 million in revenue generated in the EU.

CSRD Implementation Timeline – How to Prepare for CSRD Reporting?

CSRD reporting requires thorough preparation. Below are key steps to ensure compliance:

1. Identify if CSRD Applies to Your Company

The first step is to determine whether your company falls under CSRD reporting obligations and when reporting begins.

📌 Example: A large industrial company with more than 500 employees falls within the first wave of CSRD obligations and must report starting in 2025.

2. Develop a Sustainability Strategy

CSRD requires companies to analyze the environmental, social, and governance (ESG) impacts of their business operations. This calls for a strategic approach to sustainability and concrete goals.

📌 Example: A company may set a goal to reduce CO2 emissions by 30% by 2030.

3. Implement a Double Materiality Assessment

CSRD mandates that companies conduct a double materiality assessment, examining two perspectives:

• Impact materiality: How does the company’s operation impact the environment and society?
• Financial materiality: How do sustainability-related risks and opportunities affect the company’s financial performance?

📌 Example: A construction company may discover that sustainable building materials not only reduce environmental impact but also enhance customer trust and create a competitive advantage.

4. Prepare Reporting Systems and Processes

Companies must ensure that their data collection and reporting systems comply with CSRD requirements. This may involve:

• Defining ESG indicators
• Updating IT systems or adopting new tools
• Training staff and assigning responsibilities

📌 Example: A company may implement a reporting system, which automates the collection and analysis of ESG data (environmental, social, and governance).

5. Collect and Analyze Data

Ensure your company has the necessary data on ESG performance and use external experts if needed for analysis.

📌 Example: A retail company can measure the carbon footprint of its supply chain and explore ways to reduce it.

6. Prepare for Audits and Reporting

CSRD requires sustainability reports to be verified. This means that external auditors will review company reports.

📌 Example: Companies must collaborate with auditors to ensure the accuracy of its reports.

EU CSRD Timeline – The Impact of CSRD on Businesses

CSRD affects companies beyond just reporting:

• Increased transparency: Stakeholders such as investors and customers can assess corporate sustainability more accurately.
• Costs and investments: Implementing new reporting systems and collecting data may require significant investments.
• Competitive advantage: Companies that adapt quickly and leverage sustainability as a strategic asset can stand out in the market.

CSRD Compliance Timeline – Summary

CSRD introduces significant changes to corporate reporting obligations. It requires companies to provide more detailed and standardized sustainability reporting. By preparing in advance and utilizing the right tools, businesses can efficiently manage their reporting obligations while strengthening their sustainability strategy.

If your company needs support in preparing for CSRD reporting, consult experts – timely preparation brings clear competitive advantages! We also provide free pilot periods if you want to see how AI can revolutionize your CSRD reporting (Contact Us)