Starting in 2024, more than 50,000 EU organizations will have to follow the Corporate Sustainability Reporting Directive (CSRD). This directive lays out the rules for reporting on how they’re doing environmentally, socially, and in terms of governance – things like diversity metrics, their impact on the environment (like CO2 emissions and water use), and how they’re dealing with human rights issues.
For most of these organizations, talking about CSRD is like entering uncharted territory. Some companies may not be used to reporting on social and environmental subjects. When it comes to financial matters, they’ve got clear rules to follow, but now there are new rules called the European Sustainability Reporting Standards (ESRS). ESRS was established to standardize how companies report on their environmental, social, and governance impact and are an integral part of CSRD. To meet CSRD requirements, they have to stick to these ESRS, which means they’re moving from doing this reporting voluntarily to it being mandatory. It’s a big change for the companies covered by CSRD.