CSRD Reporting: ESG Disclosure Requirements

Read a comprehensive guide to CSRD Reporting. Read the ESG disclosure requirements for CSRD compliance, the new CSRD standards, when is it applicable, and more.
Maryam Khan
December 30, 2023

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Introduction: What is CSRD?

The Corporate Sustainability Reporting Directive (CSRD) introduced by the European Union is poised to impact a significant number of entities, encompassing those previously exempt from reporting on environmental, social, and governance (ESG) activities under the Non-Financial Reporting Directive (NFRD). As the CSRD rolls out in the fiscal year 2024, its implications extend to companies within and outside the EU, necessitating careful consideration and immediate evaluation for U.S. entities with operations or revenue in the EU.

Who Falls Under the CSRD Umbrella?

Entities falling within the scope of the Corporate Sustainability Reporting Directive (CSRD) include:

  • Companies with securities listed on an EU-regulated market, excluding micro-undertakings failing two of three specified size criteria over two consecutive balance sheet dates.
  • EU-based large undertakings, irrespective of listing status, meeting two of the following criteria on consecutive balance sheet dates:
  • Annual net turnover over €40 million
  • Balance sheet assets exceeding €20 million
  • Workforce averaging at least 250 employees annually
  • EU-based parent companies meeting criteria for large undertakings, with considerations for consolidated or combined reporting.
  • Parent companies from third countries, like the U.S., involved in consolidation with a net turnover exceeding €150 million in the EU and meeting specified criteria.

When is CSRD Applicable?

CSRD Application Timeline

What are the new CSRD Standards?

The directive empowers the European Financial Reporting Advisory Group (EFRAG) to establish the European Sustainability Reporting Standards (ESRS). The draft framework includes overarching requirements and specific disclosures applicable to all entities within the CSRD ambit.

What are the Disclosure Requirements for CSRD?

Companies will be obligated to report information essential for comprehending their impacts on sustainability matters and how these impacts influence their development, performance, and position.

  1. Holistic ESG Integration: Encompassing business strategy, governance of ESG issues, and reporting on material environmental and social factors, including the business supply chain.
  2. Regulatory Evolution: A significant advancement involves the incorporation of double materiality and value-chain impacts.
CSRD Scoping and Phase-in Reporting

Why does CSRD matter?

By compelling companies to be more transparent the CSRD stimulates the development and implementation of business strategies aligning with sustainability factors. Its expansive scope covering businesses across continents reinforces the need for concerted efforts throughout the C-suite. CEOs, CFOs, and CSOs each have distinct roles in leveraging CSRD to drive sustainable value creation.

  1. CEO Leadership in Sustainability: CSRD will empower CEOs to comprehend and integrate sustainability impacts into the core strategy for both short and long-term value creation.
  2. C-suite Collaboration and Delegation: CEOs can utilize CSRD to delegate responsibilities within the C-suite for effective implementation of sustainability systems, frameworks, and incentives.
  3. CFO's Strategic Information Management: CSRD will assist CFOs in identifying and addressing gaps in information systems, ensuring robust decision-making and reporting.
  4. Technical Expertise for Sustainability Goals: CSRD facilitates CFOs and CEOs in gaining technical expertise, understanding business opportunities and risks, and setting plans for improved sustainability performance.

In essence, Corporate Sustainability Reporting Directive (CSRD), is a pivotal step in ensuring equal emphasis on both financial and non-financial performance. Extending beyond the EU, it integrates environmental and social factors into global strategic planning. With a broader scope than its predecessor, the CSRD impacts companies worldwide, emphasizing compliance for European and multinational corporations, including SMEs. Crucially, the directive introduces third-party assurance to combat greenwashing, reinforcing the EU's commitment to preventing unsupported sustainability claims.

What happens if your company does not comply to CSRD?

However, In the event that a business fails to comply with the CSRD, it may face administrative sanctions, including three potential penalties: public denunciation, a directive to modify its conduct, and financial consequences. The specific penalty and the boundaries of sanctions within each EU member state's jurisdiction will be determined by the respective authorities.

What to do next if your company needs to comply with CSRD in 2026?

As the CSRD journey is unique for each entity, a personalized roadmap is essential. Key steps include:

  • Conducting a "double materiality" assessment
  • Collecting relevant data
  • Preparing for limited assurance

How can ESG Flo help you?

ESG Flo can be an invaluable tool to navigate the CSRD landscape. ESG Flo aids businesses in streamlining their compliance journey, offering support in data collection, analysis, and reporting, ensuring a smoother path toward CSRD adherence. ESG Flo will help you in:

Conducting a "Double Materiality" Assessment

  1. ESG Flo excels in guiding businesses through the intricacies of a "double materiality" assessment. It provides structure in not only evaluating external environmental and social impacts but also delving into internal factors affecting stakeholders. This holistic approach ensures that businesses thoroughly understand the material risks and opportunities associated with their operations.
  2. The platform's algorithmic capabilities guide businesses through the materiality assessment process, aiding in the identification of key metrics that warrant attention in CSRD reporting.

Collecting Relevant Data

  1. The process of CSRD compliance necessitates the gathering of a diverse array of data concerning environmental, social, and governance factors. ESG Flo streamlines this data collection process by providing efficient tools and methodologies.
  2. ESG Flo's data validation and augmentation features enhance the accuracy of collected information, reducing the risk of errors in CSRD reporting.
  3. The platform incorporates machine learning to adapt to evolving data requirements, ensuring businesses stay agile in response to changing regulatory demands.

Preparing for Limited Assurance

  1. ESG Flo plays a crucial role in preparing businesses for limited assurance, a key facet of CSRD compliance. By offering advanced analytics and reporting functionalities, ESG Flo ensures that the collected data is not only comprehensive but also presented in a manner aligning with assurance requirements.
  2. ESG Flo provides customizable reporting templates, enabling businesses to tailor their disclosures to specific industry standards and expectations.
  3. The platform facilitates collaborative workflows, streamlining the coordination between internal teams and external assurance providers during the audit process.


ESG Flo is the AI-powered platform working as a strategic partner for businesses navigating the CSRD landscape, streamlining your ESG compliance solution within one-window. Book a demo today to learn more.

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