From 2024, large companies are required to be transparent on their impact on climate and society through sustainability reporting. This obligation stems from the European Corporate Sustainability Reporting Directive (CSRD). But did you know that non-reporting obligated companies, such as SMEs, are also directly or indirectly affected by the introduction of CSRD? On this page, we explain what CSRD entails and how it can impact your company.
European commission aims to streamline sustainability reporting
The European commission has launched an initiative, Omnibus 1, to streamline reporting rules for companies in EU countries. The proposal modifies several aspects of the CSRD legislation. Further consultation and approval from the European parliament and the council are needed. The outcome is expected within a year.
Check within 10 minutes what CSRD means for you
Large, publicly listed companies are now required to report on their sustainability impact through the CSRD directive. Are you a supplier to such a company? Then you may be asked for ESG-date by stakeholders in your value chain. In our CSRD check, you can see per sector which data requests you can expect.
Everything you need to know about the CSRD
What is the CSRD exactly?
CSRD stands for Corporate Sustainability Reporting Directive. This European directive is part of the European Green Deal, and makes it compulsory for businesses to report on their sustainability status. Listed companies will be obliged to report on the 2024 financial year in 2025. This information is becoming increasingly important to clients, investors, regulators and other stakeholders.
When will the CSRD regulations come into force?
The group of companies directly expected to comply with the CSRD is gradually increasing every year.
The CSRD has been operating since 1 January 2024 for companies that were previously subject to the Non-Financial Reporting Directive (NFRD). As of 2025, sustainability reporting will be compulsory for all major companies. A company is termed ‘major’ if it satisfies two of the following criteria:
- Over 250 employees
- Over €50 million turnover per year
- Over €25 million on the balance sheet
The CSRD will apply to listed SMEs from 1 January 2026. Non-listed SMEs are expected to follow suit later.
Will the CSRD affect me too?
The CSRD could affect you directly and indirectly.
Directly
The group of companies directly expected to comply with the CSRD is gradually increasing every year. The CSRD has been operating since 1 January 2024 for companies that were previously subject to the Non-Financial Reporting Directive (NFRD). As of 2025, sustainability reporting will be compulsory for all major companies. A company is termed ‘major’ if it satisfies two of the following criteria:
- Over 250 employees
- Over €50 million turnover per year
- Over €25 million on the balance sheet
The CSRD will apply to listed SMEs from 1 January 2026. Non-listed SMEs are expected to follow suit later.
Indirectly
You might not have to compile a sustainability report for the time being. But you can already expect questions from larger companies about the products that you supply them with. For example, they’ll want to know how your product is made and whether you follow responsible practices. Major companies will have to be stricter with their suppliers and service providers in order to satisfy the directive themselves.
The CSRD could affect you directly and indirectly.
Directly
The group of companies directly expected to comply with the CSRD is gradually increasing every year. The CSRD has been operating since 1 January 2024 for companies that were previously subject to the Non-Financial Reporting Directive (NFRD). As of 2025, sustainability reporting will be compulsory for all major companies. A company is termed ‘major’ if it satisfies two of the following criteria:
- Over 250 employees
- Over €50 million turnover per year
- Over €25 million on the balance sheet
The CSRD will apply to listed SMEs from 1 January 2026. Non-listed SMEs are expected to follow suit later.
Indirectly
You might not have to compile a sustainability report for the time being. But you can already expect questions from larger companies about the products that you supply them with. For example, they’ll want to know how your product is made and whether you follow responsible practices. Major companies will have to be stricter with their suppliers and service providers in order to satisfy the directive themselves.
What is ESG information?
Non-financial information relating to sustainability is also known as ESG information. ESG refers to three main themes, which can be used to measure the impact of a company: Environmental (e.g. climate change), Social (e.g. working conditions) and Governance (e.g. management structure).
What does a CSRD report look like?
The CSRD is an EU directive and as such, comes under European legislation. All sustainability reports must satisfy the European Sustainability Reporting Standards (ESRS). These standards state exactly which sustainability aspects must feature in the report, ensuring that everyone compiles sustainability reports in the same way.
How do you submit a CSRD report?
Companies need to submit the report through an online portal and it must have been audited by an external statutory auditor, such as your accountant.
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