New proposal for a Corporate Sustainability Reporting Directive

The proposal includes mandatory ESG reporting, limited assurance and digital reporting for 49,000 entities in the EU, including foreign subsidiaries

The objective of the proposed Corporate Sustainability Reporting Directive (CSRD) is to improve sustainability reporting to better exploit the potential of the European single market and to contribute to the transition to a fully sustainable and inclusive economic and financial system in line with the European Green Deal and the UN Sustainable Development Goals.

The proposal also notes that the COVID-19 pandemic has accelerated the increase in users’ information needs, in particular as it has exposed the vulnerabilities of workers and of undertakings’ value chains.

The information would have to be provided mandatorily as part of management report, and entities would have to report using European Sustainability Reporting Standards. The proposed CSRD includes mandatory audit of the information provided (limited assurance) and mandatory digital reporting in ESEF format with corresponding labelling of sustainability information using a taxonomy yet to be developed.

The proposed CSRD:


Who should comply?


Revises and strengthens rules introduced by the Non-Financial Reporting Directive (NFRD). 

Aims to ensure that companies report reliable and comparable sustainability information that investors and other stakeholders need.

All large companies and all listed companies, except listed micro-enterprises. Large companies are defined as companies that exceed at least two of the following criteria at the balance sheet date:

  • Balance sheet total: EUR 20 million
  • Net revenue: EUR 40 million
  • Average number of employees in the year: 250

CSRD proposal: adopted by the Commission on 21 April 2021.

The EC proposes a transposition of the CSRD into national law by member states by 1 December 2022, so that the amendments would be applicable for the first time for fiscal years beginning on or after 1 January 2023.

Entities coming under the CSRD would have to report on:


In order to consider the limited capacities and resources of the SMEs concerned and to allow them sufficient time to prepare for the first-time application of the requirements, the proposal provides that SMEs may use separate sustainability reporting standards for SMEs and do not have to start reporting until three years after the effective date (i.e., 1 January 2026).

Source: EC publishes proposed Corporate Sustainability Reporting Directive ( by Deloitte April 2021.

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