The Corporate Sustainability Reporting Directive (CSRD) is set to revolutionise sustainability reporting across Europe. With expanded scope and more detailed requirements, it’s essential for companies to understand the key compliance deadlines and prepare accordingly. This guide outlines the CSRD compliance timeline for different types of companies, along with a checklist to help you get ready for each reporting phase.
What is CSRD?
The Corporate Sustainability Reporting Directive (CSRD) is a European Union regulation that requires companies to provide detailed disclosures on their environmental, social, and governance (ESG) impacts. CSRD builds upon the previous Non-Financial Reporting Directive (NFRD), introducing more comprehensive and standardised reporting requirements. Its aim is to enhance transparency, comparability, and accountability in sustainability reporting.
For more information on CSRD, follow the link to our CSRD primer article below:
Who Needs to Comply with CSRD?
The CSRD applies to a broad range of companies, including:
Micro-Undertakings
Smallest companies that meet at least two of these criteria:
Balance sheet total ≤ €450,000
Net turnover ≤ €900,000
Average employees ≤ 10
Small and Medium Enterprises (SMEs)
Companies that meet at least two of these criteria:
Balance sheet total ≤ €25 million
Net turnover ≤ €50 million
Average employees ≤ 250
Large Undertakings
Companies that exceed at least two of these criteria:
Balance sheet total > €25 million
Net turnover > €50 million
Average employees > 250
Large Groups
Groups of companies that, on a consolidated basis, exceed at least two of these criteria:
Balance sheet total > €25 million
Net turnover > €50 million
Average employees > 250
Key Reporting Deadlines
The CSRD will be implemented in phases, with different compliance deadlines based on the type of company:
Large Public Interest Entities (PIEs) with over 500 employees:
First Reporting Year: 2025
Reports Covering: Financial year 2024
Deadline for Submission: Reports must be published in early 2025, covering the data from the 2024 financial year.
Other Large Companies:
First Reporting Year: 2026
Reports Covering: Financial year 2025
Deadline for Submission: Reports must be published in early 2026, covering the data from the 2025 financial year.
Listed SMEs, Small and Non-Complex Institutions, and Captive Insurance Companies:
First Reporting Year: 2027
Reports Covering: Financial year 2026
Deadline for Submission: Reports must be published in early 2027, covering the data from the 2026 financial year.
Note: SMEs have the option to opt out of reporting for the first two years, effectively making it mandatory by 2028.
Non-EU Companies with significant EU presence:
First Reporting Year: 2029
Reports Covering: Financial year 2028
Deadline for Submission: Reports must be published in early 2029, covering the data from the 2028 financial year.
Assurance adoption timelines
The following assurance standards will be introduced to assess submitted CSRD reports during the following timelines:
Limited Assurance Standard
Applicable to: All companies within the scope of the CSRD during the initial phase of reporting.
Timeline: To be adopted by 1 October 2026.
Description: Limited assurance focuses on evaluating whether the sustainability information is plausible, with a lower level of scrutiny compared to reasonable assurance.
Reasonable Assurance Standard
Applicable to: All companies under the CSRD, transitioning from limited assurance after the initial phase.
Timeline: To be adopted by 1 October 2028.
Description: Reasonable assurance involves a more thorough examination, providing a higher level of confidence in the accuracy and completeness of sustainability disclosures.
IAASB International Standard on Sustainability Assurance (ISSA) 5000
Applicable to: Likely to be aligned with global assurance requirements for large undertakings and large groups, particularly those operating across multiple jurisdictions.
Timeline: Effective from 15 December 2026.
Description: A globally harmonized standard designed to provide consistent assurance practices for sustainability reporting.
Checklist for Preparing for CSRD Compliance
To ensure timely and effective compliance with CSRD, companies should follow a structured approach. Here’s a checklist to help you prepare for each reporting phase:
1. Understand the Requirements:
Familiarise Yourself with CSRD: Review the official CSRD documentation and understand the specific requirements relevant to your company.
Identify Applicable Reporting Standards: Determine which European Sustainability Reporting Standards (ESRS) are relevant to your industry and operations.
2. Conduct a Double Materiality Assessment:
Assess Material Issues: Identify both financial and impact materiality, focusing on how sustainability issues affect your business and how your business affects society and the environment.
Engage Stakeholders: Consult with key stakeholders, including investors, customers, employees, and communities, to gather input on material issues.
3. Establish Data Collection and Management Systems:
Set Up Data Collection Processes: Implement systems to collect accurate and reliable data on ESG metrics, ensuring consistency and transparency.
Leverage Technology: Use digital tools and platforms to streamline data collection, analysis, and reporting.
4. Develop Internal Reporting Procedures:
Integrate Sustainability Reporting: Ensure that sustainability reporting is integrated into your company’s overall reporting and governance processes.
Assign Responsibilities: Designate a team or department responsible for managing CSRD compliance and reporting.
5. Seek Assurance and Verification:
Third-Party Assurance: Plan to have your sustainability data reviewed by an independent auditor to meet CSRD’s assurance requirements.
Continuous Improvement: Use assurance feedback to improve the accuracy and quality of your ESG reporting.
6. Train Employees and Raise Awareness:
Employee Training: Educate your employees about CSRD requirements and the importance of sustainability reporting.
Leadership Engagement: Ensure that senior management and the board of directors are engaged and supportive of the CSRD compliance process.
7. Stay Informed and Update Regularly:
Regulatory Changes: Stay updated on any changes or amendments to CSRD requirements.
Review and Adjust: Regularly review your reporting practices and make adjustments as needed to ensure ongoing compliance.
Conclusion
Preparing for CSRD compliance requires careful planning, structured processes, and a commitment to transparency and sustainability. By understanding the key deadlines and following this checklist, companies can ensure they are ready to meet the CSRD requirements and contribute to a more sustainable and accountable business environment.
Need Help?
If you have questions about CSRD compliance or need assistance in preparing your company for the upcoming reporting requirements, contact the KEY ESG team via our in-app chat function or email us at support@keyesg.com. We’re here to support your sustainability journey.