The Corporate Sustainability Reporting Directive (CSRD) represents the most ambitious overhaul of sustainability reporting requirements in European history. Replacing the earlier Non-Financial Reporting Directive (NFRD), CSRD dramatically expands the scope, depth, and verifiability of what companies must disclose about their environmental, social, and governance (ESG) performance.
Why CSRD Was Introduced
Investors, regulators, and civil society have long struggled with inconsistent, incomparable, and often unverifiable sustainability claims. The European Union designed CSRD to create a level playing field — one where sustainability data is as standardised and credible as financial data. The directive is a cornerstone of the EU's broader Green Deal and Sustainable Finance agenda.
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Who Is Affected and When
CSRD is being phased in across several waves. Large public-interest entities with more than 500 employees were required to report from financial year 2024 onwards. Large companies exceeding two of three thresholds — 250 employees, €40 million turnover, or €20 million in total assets — will report from 2025. Listed SMEs follow in 2026, with a possible opt-out until 2028.
What Must Be Reported Under CSRD
Reporting is structured around the European Sustainability Reporting Standards (ESRS), developed by the European Financial Reporting Advisory Group (EFRAG). The ESRS cover twelve topical standards across environmental topics (including climate, biodiversity, and resource use), social topics (workforce, communities, and consumers), and governance topics. A cross-cutting standard on general requirements and another on general disclosures apply to all companies.
- Double materiality assessment — companies must assess both how sustainability issues affect them financially and how their activities affect society and the environment
- Value chain reporting — disclosures must extend beyond direct operations to upstream suppliers and downstream customers
- Third-party assurance — reports require limited assurance from an independent auditor
- Digital tagging — disclosures must be machine-readable and tagged in the European Single Electronic Format (ESEF)
How to Prepare for CSRD
Preparation begins with a gap analysis — mapping your current data collection practices against the specific disclosure requirements of the applicable ESRS standards. From there, organisations typically need to establish data governance processes, assign internal responsibilities, engage their supply chain, and build the reporting infrastructure that will generate and store the required information.
At Enable Good, we guide organisations through every stage of CSRD readiness — from the initial materiality assessment to the final report structure. If your organisation is approaching its first CSRD reporting cycle, the time to act is now.
