The EU Commission publishes a CSRD FAQ to help Companies implement New Sustainability Reporting Rule

The European Commission published a new set of frequently asked questions (FAQs) aimed to support companies and other stakeholders, such as auditors, in implementing sustainability reporting requirements of the EU’s Corporate Sustainability Reporting Directive (CSRD). The first reports are set to start from next year, based on the 2024 financial year.

The CSRD is a major update to the EU’s Non-Financial Reporting Directive (NFRD), the previous EU sustainability reporting framework, which significantly expands the number of companies required to provide sustainability disclosures to over 50,000 from around 11,000. Based on new foundational European Sustainability Reporting Standards (ESRS), the CSRD introduces more detailed reporting requirements on company impacts on the environment, human rights and social standards and sustainability-related risk.

The CSRD took effect from the start of 2024 for large public-interest companies with over 500 employees, with the first reports to be issued in 2025, followed by companies with more than 250 employees or €40 million in revenue in the following year, and listed SMEs a year after. The new FAQs reflect input received from companies. The FAQs are intended to help reduce the administrative burden on companies, providing greater clarity and certainty. The objective is to facilitate the compliance of stakeholders with the regulatory requirements in a cost-effective way and to ensure the usability and comparability of the reported information on sustainability.
 

Key Topics
Some of the key topics covered by the FAQs include:
  • the scope of the rules, 
  • the determination of company size categories for compliance dates, 
  • exemptions, 
  • which sets of ESRS to use, and
  • considerations to consider for the use of estimates if companies are not able to obtain value chain information. 
The FAQs also cover auditing and assurance-related issues, such as approval and training requirements for auditors, and accreditation requirements for independent assurance providers.


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