Corporate Sustainability Reporting: What the EU CSRD is

The EU Corporate Sustainability Reporting Directive (CSRD) is a legislative framework requiring EU-based businesses – and certain non-EU companies – to disclose their environmental, social, and governance (ESG) performance. This initiative aims to promote transparency, build trust, and align corporate behaviour with Europe’s ambition to be climate-neutral by 2050.

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.

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
• Net turnover exceeding €40 million
• Total assets over €20 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

Reporting deadlines:

• 2025: For companies already subject to the NFRD (reporting on 2024 data)
• 2026: For large companies not currently subject to the NFRD
• 2027: For listed SMEs (optional opt-out until 2028)
• 2029: For non-EU companies meeting the threshold

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

The goal is to reduce the burden on smaller entities while maintaining comprehensive sustainability insights from major businesses.

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. 

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.

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

Effective sustainability reporting under CSRD builds trust and improves an organisation’s long-term resilience and reputation.

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

Training providers such as Greenomy Academy and others offer flexible e-learning formats that cover the directive, ESRS, and double materiality assessment techniques.

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

This is particularly beneficial for companies navigating the CSRD for the first time or lacking dedicated ESG teams.

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.

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.