What Is CSRD?
Where It Applies
Though introduced by the European Union, the CSRD’s reach extends beyond the EU. Non-EU companies with substantial activity within the EU – such as subsidiaries or branches – are subject to the same reporting obligations if they meet the thresholds defined in the directive.The CSRD Framework
The CSRD builds on and replaces the Non-Financial Reporting Directive (NFRD). It expands the scope and depth of required sustainability disclosures and introduces the European Sustainability Reporting Standards (ESRS). Reporting is not limited to ESG performance but also includes impacts, risks, governance structures, and business strategy alignment with sustainability and finance goals. The directive also integrates tax transparency, reinforcing ethical responsibility in financial planning.CSRD Legislative Update 2025
The Corporate Sustainability Reporting Directive (CSRD) is in the final stages of legislative approval throughout 2025, following proposed amendments by the European Commission as part of the Omnibus I package aimed at simplifying and reducing the sustainability reporting burden for companies. Although the European Parliament has approved key updates, such as revised scope thresholds and updated reporting deadlines, these changes still require final adoption by the Council of the EU, with a vote expected by Q3 2025.Once the Council formally approves the amendments, EU Member States, including Ireland, will begin transposing the updated CSRD regulations into national law. Please note that some provisions mentioned in this article reflect recent parliamentary approvals but are not legally binding until the Council’s formal adoption. For the latest CSRD compliance requirements and updates, consult official EU sources or legal experts.
Companies Within the Scope of Reporting
Scope and Timing of Reporting
The CSRD applies to:
- Large EU companies meeting at least two of the following:
- More than 250 employees (Propose change to "1,000 employees" pending final EU vote)
- Net turnover exceeding €40 million (May be revised to €50 million)
- Total assets over €20 million (May be revised to €25 million)
- Listed SMEs on EU-regulated markets (excluding micro-undertakings)
- Public-interest entities, such as banks and insurers
- Non-EU companies generating more than €150 million in annual turnover in the EU and with at least one EU branch or subsidiary
- 2026: For companies already subject to the NFRD (reporting on 2025 data)
- 2028: For large companies not currently subject to the NFRD
- 2029: For listed SMEs (reporting on 2028 data, opt-out remains until then)
- 2030: For non-EU companies meeting the thresholds
Entities Involved Based on Criteria
The CSRD ensures that all major actors in the European market are held accountable. Group-level and consolidated reporting is required, meaning parent companies must report for all included subsidiaries under unified standards.Exclusions from Scope of Reporting
Exemptions include:- Micro-undertakings (fewer than 10 employees or turnover/assets below €2 million)
- UCITS and AIFs (specific types of investment funds)
- Subsidiaries already covered by a compliant parent company report
- Small, non-listed companies, unless designated by national regulators
As of Q2 2025, proposed changes would exempt 80% of companies from CSRD reporting by raising thresholds. Final approval pending.
Key Features of Corporate Sustainability Reporting
ESG / ESRS
The ESRS (European Sustainability Reporting Standards) provide a detailed framework to ensure consistency across ESG disclosures. Companies must report not just on carbon emissions, but on broader environmental impacts, workforce diversity, governance, supply chain practices, and more.Proposed simplifications would reduce the volume of required ESRS data points and postpone sector-specific standards – subject to approval.
Double Materiality (DMA)
CSRD introduces double materiality: companies must assess and disclose how sustainability issues affect the business (financial materiality) and how the business affects society and the environment (impact materiality). This holistic view encourages more responsible decision-making.Consolidated Reporting
Parent companies are required to file consolidated sustainability reports covering all in-scope subsidiaries. This ensures clarity across complex business structures and prevents gaps in disclosure.Frequency and Format of Reporting
- Reports must be published annually as part of the company’s management report
- Sustainability disclosures must be digitally tagged in the XHTML format using XBRL taxonomy
- This enhances comparability and accessibility of data across digital platforms
Assurance
To ensure reliability, companies must obtain third-party limited assurance of their sustainability reports starting from their first reporting year. This requirement is expected to evolve into reasonable assurance over time, bringing sustainability in line with the rigour of financial audits.Shift to reasonable assurance has been postponed under new draft – subject to parliamentary approval.
Enforcement
Each EU member state is responsible for enforcing CSRD. Regulatory authorities will monitor compliance and can impose penalties for non-conformance. These may include fines, legal action, and in some cases, exclusion from public contracts.Stakeholder Expectations
CSRD addresses growing demands from stakeholders for greater accountability and transparency. Stakeholders expect:- Transparent ESG performance data
- Clear demonstration of sustainable business practices
- Engagement through meaningful dialogue
- Measurable goals and progress reporting
- Independent third-party verification
How to Complete Your CSRD Reporting
CSRD Trainings
Organisations can access training to support compliance and build internal capacity. Options include:- Fundamentals – Ideal for professionals new to sustainability
- Advanced – For those managing reporting processes or strategy
- Professional – For executives or those leading ESG transformation
Outsourcing
Many organisations choose to outsource their CSRD reporting to specialised providers. Outsourcing offers:- Access to ESG expertise and tools
- Cost-effective compliance management
- Reduced burden on internal teams
- Greater assurance of accuracy and regulatory alignment
IDA Ireland has a dedicated interdisciplinary sustainability team which works hand in hand with our clients to overcome challenges and support investments that deliver impact. We are focused on supporting businesses to build and grow new technology capability in Ireland.
Furthermore IDA Ireland has partnered with Skillnet Ireland to launch the Sustainability Leaders Programme support businesses to develop and implement climate-positive and carbon reduction measures to help with CSRD in the future.
FAQs About CSR
What is a corporate sustainability report?A corporate sustainability report communicates an organisation’s ESG strategy, impacts, and performance. It offers stakeholders transparency about how the business contributes to – or mitigates – environmental and social challenges.
Is CSR reporting mandatory?
Yes, for many companies. The CSRD mandates sustainability reporting for large companies, listed SMEs, and certain non-EU firms, making it compulsory rather than voluntary.
Note that upcoming legislation may change which companies are required to report – e.g., raising the minimum threshold to 1,000 employees.
What is the difference between ESG and corporate sustainability?
ESG refers to measurable criteria used by investors to assess risk and value.
Corporate sustainability is a broader concept focused on long-term responsible business practices that benefit society and the environment.
Is sustainability reporting the same as CSR?
Not quite. CSR often refers to a company’s social initiatives and ethical practices. Sustainability reporting is more comprehensive, data-driven, and focused on long-term material risks and impacts across ESG areas.