1 year to the transposition deadline

6 July 2023 marks one year until the deadline to the transposition of Directive (EU) 2022/2464: the Corporate Sustainability Reporting Directive, or CSRD.

The CSRD will require 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’s value chain.
   

Initially, application of the CSRD will be limited to entities that are currently already within scope of the Non-Financial Reporting Directive (NFRD). However, all other large undertakings and large groups will be within scope for financial years starting on or after 1 January 2025.

Additionally, SMEs with securities listed on a regulated market in a Member State will fall within scope for financial years starting on or after 1 January 2026.

Third country undertakings will also fall within scope of the CSRD, to the extent that they have a qualifying presence within the European Union – whether by virtue of a subsidiary undertaking or a branch – for financial years starting on or after 1 January 2028.

At Deloitte, we can set your business up for success in the ESG space, and get ahead of your CSRD reporting obligations.

Why work with us?

• Trusted consultants: We invest in relationships and deliver results;
• Innovative consulting: We work at the frontier of corporate sustainability; we helped to define many of the sustainability frameworks and guidelines that are now well-established in global businesses;
• Flexible solutions: We’re confident working with any of your internal stakeholders;
• Collaborative approaches: We partner with niche specialists when delivering our ESG services to bridge the gap between business and academia, technology and science; and
• Access to a large network: Our scale means we can help your global businesses with most environmental, societal or governance challenges, wherever they are faced.

For more information, feel free to reach out to our ESG team through the contact details below.