Building upon its predecessor, the Non-Financial Reporting Directive (NFRD), the CSRD expands the scope of reporting requirements, aiming to establish a comprehensive framework for sustainability reporting by European companies.

Key Objectives:

The CSRD sets forth several key objectives that are poised to shape the future of corporate reporting:

1. Harmonization: The directive aims to create a common set of standards for sustainability reporting, ensuring consistency and comparability among companies across the EU. By harmonizing reporting requirements, the CSRD will facilitate easier analysis and benchmarking, enabling stakeholders to make more informed decisions.

2. Materiality and Double Materiality: The CSRD introduces the concept of “double materiality” to encourage companies to consider both the financial impact of sustainability issues on their business and the impact of their business on society and the environment. This approach emphasizes the significance of considering environmental, social, and governance (ESG) factors in corporate decision-making processes.

3. Digitalization and Accessibility: To promote accessibility and facilitate data utilization, the CSRD advocates for the use of digital reporting formats, such as eXtensible Business Reporting Language (XBRL). Digital reporting will enhance the comparability, reliability, and usefulness of reported sustainability information, benefiting stakeholders and enabling data-driven decision-making.

4. Assurance and Audit: The CSRD introduces a mandatory requirement for companies to obtain assurance on their reported sustainability information. This measure aims to enhance the reliability and credibility of sustainability reports, providing stakeholders with greater confidence in the disclosed data.