The Corporate Sustainability Reporting Directive (CSRD) is reforming ethical reporting in the EU. Replacing the NFRD, it brings stricter, more detailed ESG disclosure rules. Starting in 2025, over 50,000 companies, including some outside the EU, must comply.
If your business is affected, now is the time to understand the CSRD requirements and begin preparing for full compliance.
Understanding the CSRD
The CSRD aims to improve how companies share their environmental, social, and governance (ESG) performance. It introduces detailed standards for sustainability reporting. These are based on the European Sustainability Reporting Standards (ESRS), created by the European Financial Reporting Advisory Group (EFRAG).
CSRD goes beyond financial figures. It focuses on providing transparent, comparable, and trustworthy ESG data to investors, consumers, regulators, and the public.
CSRD Reporting Requirements 2025: The Key Rules
Here are the major reporting requirements that companies will need to meet by 2025:
1. Expanded Company Coverage
Starting in 2025, CSRD applies to large EU companies that meet at least two of the following conditions:
Over 250 employees
More than €40 million in revenue
More than €20 million in total assets
In addition, listed small and medium-sized enterprises (SMEs) will need to begin reporting by 2026, although they get a phase-in period until 2028. Non-EU firms earning over €150 million annually in the EU and operating through subsidiaries or branches will also need to follow the CSRD.
2. Detailed ESG Topics
Companies must provide clear and measurable reports on various ESG areas, such as:
Climate change actions and carbon footprint
Resource use and pollution control
Biodiversity protection and conservation
Employee rights, diversity, and inclusion
Human rights policies
Anti-corruption measures and business ethics
Corporate governance and leadership practices
Reports should include short-, medium-, and long-term goals, along with measurable progress indicators.
4. Digital Reporting Format
CSRD reports must be filed in a digital format using the European Single Electronic Format (ESEF) and include XBRL tags. This ensures the data is easy to read, compare, and analyze across systems.
5. Independent Assurance
To ensure credibility, reports must be reviewed by independent auditors. In 2025, a limited assurance will be required, meaning a basic check of the information. Over time, stricter verification rules will be introduced.
How to Prepare for CSRD Compliance
To meet the 2025 deadline, companies need to begin preparing immediately. Here are the key steps:
Conduct a double materiality opinion to understand internal and external impacts.
Compare current ESG practices with the new ESRS guidelines.
Set up data management systems for collecting and tracking ESG data accurately.
Train staff on the new reporting requirements and expectations.
Collaborate with auditors to prepare for assurance checks.
If your business already reports under NFRD, you’ll be the first group to transition to CSRD reporting—starting with your 2024 financial data.
Why CSRD Matters
The csrd promotes transparency, accountability, and sustainability. It helps firms respond to growing demands from stakeholders who want to see clear and accurate information about ESG performance. Companies that comply not only avoid legal penalties but also gain a competitive edge by showing leadership in sustainability.
Get ready for CSRD Reporting Requirements 2025 now. Starting preparations today will help ensure your company stays compliant and trusted in a fast-changing business environment.
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