Sustainability reporting under the EU’s CSRD (Corporate Sustainability Reporting Directive) mandates companies to disclose comprehensive information on their environmental, social, and governance (ESG) performance.

Enhancing corporate transparency and accountability, CSRD requires companies to report on their sustainability strategies, risks, and performance in alignment with the EU Taxonomy and European Sustainability Reporting Standards (ESRS).

2025 is the first year that businesses are required to report, and applies to large companies already subject to the Non-Financial Reporting Directive (NFRD).

From 2026 there is a significant broadening of corporate sustainability performance requirements. If you have more than 250 employees, net turnover exceeds €40 million and/ or have assets above €20 million, you need to pay attention!

Reporting must be done according to ESRS templates, with the extent of data entries dependent on a company’s sector, size, and impact.

Systems must be in place to collect the large quantity of data required. Many companies choose to begin one year ahead of the legal deadline allowing, for example, for a draft report to be produced and analysed to minimise potential disruption after submission.

The Corporate Sustainability Due Diligence Directive (CSDDD) requires large companies to identify, prevent, and mitigate adverse environmental and human rights impacts within their operations, subsidiaries, and supply chains.

CSDDD emphasises corporate impacts on people and the environment and requires businesses to integrate due diligence into their policies, assess risks, take corrective action, and publicly report on their efforts.

The directive applies to large EU companies (and non-EU companies that meet the criteria within the EU market) with over 500 employees and a net turnover above €150 million. Within so-called ‘high impact’ sectors, the employee criteria reduces to 250, and the net turnover criteria reduces to € 40 million.

’’ Sustainability Reporting requirements are a growing concern for a quickly increasing number of organisations.

We can help you untangle the data capture, reporting and assessment complexities and to extract value from the process.

Ultimately, we are here to help you find balance with your sustainability responsibilities.’’

Both CSRD and CSDDD require companies to address climate targets; CSRD requires businesses to report of CO₂ emissions and climate targets, whereas CSDDD requires businesses to take action to prevent, mitigate and the address impacts of climate change.

The EU Taxonomy is a classification system that defines which activities a company undertakes can be considered environmentally sustainable under EU law. It helps stakeholders identify activities that contribute to the EU’s climate and environmental objectives.

Under the CSRD, companies must assess and disclose how much of their revenue, capital expenditure, and operating expenditure align with the EU Taxonomy.

To be aligned, an activity must contribute to a minimum number of ‘environmental objectives’ whilst not causing significant harm to any of them, and while ensuring a certain level of ‘social safeguards’ are in place.