Flash Report — Corporate Sustainability Reporting Directive (CSRD) Approved by European Council; More Than 50,000 Organizations Affected

Ellen Holder, Director Sustainability and ESG Lead Europe, Protiviti Germany

On 28 November, the European Union (EU) Council gave its final approval to the Corporate Sustainability Reporting Directive (CSRD), which will require new, standardized and detailed sustainability reporting by companies. The CSRD represents a significant expansion from the earlier Non-Financial Reporting Directive (NFRD), which it replaces, and exceeds all previous sustainability reporting requirements, both in the number of companies affected — from around 12,000 today to approximately 50,000 — and in the scope of its reporting requirements.

The EU has set a goal, in the European Green Deal, to make Europe the first climate-neutral continent. Sustainability disclosures mandated by the CSRD will likely play a crucial role as a basis for investment decisions regarding this transformation toward climate neutrality.

Following the signing of the legislative act by the President of the European Parliament and the President of the Council, the CSRD will be published in the Official Journal of the European Union and will enter into force 20 days thereafter. EU member states will have 18 months to codify the directive into national law.

In this Flash Report, we summarize the key provisions of the directive, including the scope of companies affected by it and the timelines for implementation, and we highlight areas of special consideration and next steps for companies affected by the directive.

Read the full text of the Corporate Sustainability Reporting Directive at https://data.consilium.europa.eu/doc/document/PE-35-2022-INIT/en/pdf.

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