24 November 2022

AccountancyEurope: FAQs: all you need to know about the Corporate Sustainability Reporting Directive

The CSRD introduces more detailed reporting requirements than its predecessor the Non-Financial Reporting Directive (NFRD). 50,000 companies will now have to comply with the new rules, compared to 12,000 for the NFRD.

The EU policymakers reached an agreement on the Corporate Sustainability Reporting Directive (CSRD) that will come into force before the end of 2022. It brings sustainability reporting to the same level as financial reporting for the first time ever. This is fundamental to support the EU Green Deal’s ambitions and transform Europe into the first climate neutral economy by 2050.  

Companies will have to disclose sustainability information in their management report according to mandatory European sustainability reporting standards and file it in a digital, machine-readable format. The CSRD also requires limited assurance on sustainability reporting. In the FAQs below, we provide a snapshot of these key changes that CSRD brings. 

The accountancy profession will need to be ready for this crucial shift and make sure we can support the CRSD’s reporting and assurance aspects. Read our statement on the CSRD.

We are happy to continue the discussion on sustainability matters and elaborate on the topics covered. Please contact vita@accountancyeurope.eu to discuss this further.

 

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Questions & Answers

1. What companies have to apply the new rules?
2. What if the company is a subsidiary of a large group?
3. When will those rules start applying?
4. What is the scope of reporting requirements?
5. Where should companies report?
6. What reporting standards are companies expected to use?
7. When are reporting standards expected to be adopted?
8. In what format should companies report?
9. Is independent third-party assurance mandatory?
10. What assurance level is required?
11. What is the scope of the assurance engagement?
12. What assurance standards are expected to be used?
13. Who the CSRD mandates to provide assurance of sustainability reporting?
14. Are there any specific educational qualifications necessary to provide assurance services?

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Sustainability Reporting 

1. What companies have to apply the new rules?

• all listed companies on the EU regulated market (including listed SMEs, but no micro-enterprises) 
• all large companies exceeding two of the three following criteria (as per the Accounting Directive 2013/34/EU): 
  • 250 employees during the financial year 
  • balance sheet total EUR 20 million  
  • net turnover EUR 40 million  

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