CSRD: Who needs to report?


Reading time: 2-3 minutes


In January 2023, the European Union adopted a new directive aimed at modernizing and strengthening standards for corporate non-financial reporting. This directive, known as the Corporate Sustainability Reporting Directive (CSRD), is part of the European Green Deal, a series of actions undertaken by the European Union and its institutions to transform the EU economy.

But who does this directive apply to?

After a brief introduction on the CSRD, we’ll look at this issue and the timetable companies will have to follow to comply.



What is the CSRD?


The CSRD is a European directive adopted in January 2023 that requires certain companies to publish information relating to their sustainable, social and governmental (ESG) practices. In addition, they will have to report on the interaction between their activities and the environment, adopting an approach known as double materiality. In other words, they will have to provide information on the impact of their activities on the environment, and on how the environment influences their activities.

The CSRD also requires companies to set precise targets and report on their performance over time.



Who does the CSRD apply to?


The CSRD will lead to mandatory non-financial reporting for over 50,000 companies in Europe.

This includes large, medium-sized and small companies listed on European markets, as well as large unlisted European companies. Some non-European companies will also be affected.

For other companies not subject to this reporting obligation, the European Union nevertheless encourages them to publish their own non-financial information in accordance with the standards specified in the new directive.


Companies listed on European markets

Large, small and medium-sized listed companies will have to comply with the CSRD. Large companies already subject to the NFRD (Non-Financial Reporting Disclosure) directive will have to do so from 2024, while SMEs will have to start reporting from 2026, with the option of deferring their obligation until 2028.

In order to fall within the scope of the CSRD, listed SMEs will have to exceed at least two of the following three thresholds:

  • Totals assets exceeding 350,000 euros;
  • Net annual revenue exceeding 700,000 euros;
  • Have more than 10 employees (on average).


Unlisted European companies

From 2025, certain companies will have to comply with the CSRD even if they are not listed on a European stock exchange. They will have to meet at least two of the following three conditions:

  • Have more than 250 employees;
  • Total assets exceeding 20 million euros;
  • Total annual revenue of at least 40 million euros.


Non-European companies

If a company generates revenue that amounts to more than €150 million on the European Union market, it will also have to comply with CSRD from 2029. This requirement also applies to subsidiaries of these groups, which will have to report on their parent company.



Why businesses that aren’t concerned should start acting now


As we have seen, around 50,000 companies will be obliged to report on their corporate social responsibility (CSR) activities and commitments. The CSRD broadens the scope of the NFRD, and we expect more and more companies to be affected by such directives.

Indeed, the European Union is also recommending that unaffected companies start reporting on their CSR practices according to the standards proposed by the CSRD. There are several reasons for doing so:

  1. Stakeholders (investors, customers, employees, etc.) are attaching increasing importance to corporate sustainability practices;
  2. Sustainability reporting is a way for companies to distinguish themselves from their competitors;
  3. Sustainability reporting enables companies to identify and manage the risks and opportunities associated with sustainability issues;



Is your company on track?


Discover where your company is standing with its climate strategy and the CSRD compliance in just 5 minutes.