CSRD explained for businesses for businesses
Direct answer
The CSRD is the European directive that requires large and listed companies to report on sustainability according to the ESRS standards. This CSRD explanation for businesses sums it up: in your management report you set out your impact on people and the environment and the sustainability risks your company faces, checked by an auditor. Its scope and timeline are currently being revised through the Omnibus package.
- Clear definition
- Data-driven assessment
- Risks and opportunities visible
- Practical next steps
CSRD explained for businesses: scattered information versus Energy Intelligence
Sustainability was long reported separately from the annual figures, often in a standalone and non-binding report. The European Union wants that information to be reliable, comparable and verifiable, just like financial figures. That is why the CSRD was introduced. A buyer who wants to know how green a supplier operates, or a bank assessing a loan, can then find the data in a fixed place. It matters to larger companies and listed businesses, and indirectly to their suppliers.
- The CSRD requires reporting on environmental, social and governance topics (ESG) according to uniform European ESRS standards.
- The basis is double materiality: you report both on your effect on the environment and on how sustainability issues affect your company financially.
- The information sits in the management report, is digitally tagged and checked by an auditor; exactly which companies fall within scope is being revised.
Insight
Traditional approach
Information is scattered across portals, documents, invoices or separate spreadsheets.
Modern approach
Data, context and interpretation are brought together into a clear decision picture.
Decision-making
Traditional approach
Choices are made based on averages, assumptions or occasional analyses.
Modern approach
Scenarios, KPIs and current measurement data make the trade-off more concrete and repeatable.
Follow-up
Traditional approach
Actions often stay non-committal or disappear into separate reports.
Modern approach
Follow-up actions, monitoring and reporting are linked to the same energy data.
What exactly is the CSRD?
CSRD stands for Corporate Sustainability Reporting Directive, the European directive for sustainability reporting. It replaces the older directive on non-financial information and tightens the requirements. Companies report according to the ESRS, the European Sustainability Reporting Standards, developed by EFRAG and adopted by the European Commission. The starting point is double materiality. You look at two sides: what influence your company has on people and the environment, and how sustainability topics such as climate risk or energy prices affect your own results. The reporting does not sit in a standalone document, but in the management report as part of the annual accounts.
- The CSRD is a European directive; each member state, including the Netherlands, transposes it into national law.
- Reporting follows the ESRS standards, developed by EFRAG.
- Double materiality means reporting on outward impact and on inward financial risk.
- The sustainability information belongs in the management report, not in a standalone report.
Which companies does the CSRD apply to?
The CSRD is intended for large companies and for listed businesses, with a phased introduction in which the largest companies come first. Whether a company falls within scope depends on thresholds around size, such as number of employees, balance sheet total and turnover. This scope is being revised. Through the Omnibus simplification package the EU is reducing the number of companies required to report and simplifying the requirements; the direction is to focus the duty on the largest companies. The start dates for later groups have also been postponed, known as stop-the-clock. Concrete thresholds and start dates are therefore not fixed and are shifting. To find out whether it applies, check the current position with the Dutch enterprise agency RVO or the national government.
- The target group is large companies and listed businesses, introduced in phases.
- Whether you fall within scope depends on thresholds around staff, balance sheet and turnover.
- The Omnibus package aims to narrow the scope and simplify the rules.
- A stop-the-clock proposal postpones the start dates; thresholds and timeline are being revised.
What does the CSRD require from your company?
The core is that you gather reliable sustainability data across your entire business chain, so including suppliers and sometimes customers. Think of energy use, emissions, treatment of staff and governance matters. You record that data according to the ESRS and include it in the management report. Two requirements make the CSRD stricter than voluntary reports. First, an auditor checks the sustainability information, just as with the financial figures. Second, you tag the information digitally, so that computers and supervisors can read and compare it. Even if your company is not required to report itself, a large customer may ask you for this data. Preparation takes time, especially getting the data in order.
- Gather sustainability data across the whole chain, including suppliers.
- Report according to the ESRS in the management report, not in a standalone report.
- An auditor checks the sustainability information (assurance).
- The information is digitally tagged so it is machine readable and comparable.
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