CSRD: Transposition deadline approaches

The deadline for the transposition of the Corporate Sustainability Reporting Directive, or CSRD, into national law is 6 July 2024.

As of 1 January 2024, the provisions of the CSRD will already have practical relevance for entities already within scope of the Non-Financial Reporting Directive (NFRD), which will need to include data from 1 January 2024 in their first annual sustainability report.

All other in-scope entities will fall within scope of the CSRD at a later stage.

• The CSRD requires in-scope entities to carry out annual sustainability reporting, which the EU is now seeking to elevate to the same level of criticality as traditional financial reporting.
  
  The complexity and breadth of these obligations require that any business falling within scope of sustainability reporting, takes early action to ensure that it is on the right road towards compliance by the time the CSRD comes into full regulatory effect.
  
  Among other things, in-scope entities will be required to carry out annual sustainability reporting vis-à-vis:
• The resilience of their business model to risks related to environmental, social and governance (ESG) matters;
• The compatibility of their business model with the Paris Agreement’s 1.5°C limit for global warming;
• Time-bound targets to reduce greenhouse gas (GHG) emissions and a scientifically-evidenced statement of progress towards those targets;
• Policies and due diligence processes applied by the business with regard to sustainability matters; and
• Sustainability risks and impacts within and throughout the business’ value chain.