ESRS and CSRD: A CSRD guide through 2028
On 31 July 2023, the European Commission (EC) took a historic step towards sustainability reporting by adopting the final delegated act of the European Sustainability Reporting Standards (ESRS). This milestone is crucial for companies and institutions striving for transparency and responsible business conduct.
The ESRS, laid down in the delegated act, serves as the standard for sustainability reporting and supports the Corporate Sustainability Reporting Directive (CSRD). The CSRD is designed to ensure a consistent and comparable approach within the EU, with the aim of encouraging companies to be transparent about their impact on the environment, social aspects and governance.
With the legislation now in force, we take a look at the implementation phases from 2024 to 2028, which affect companies of various sizes and types.
Dutch law must implement the CSRD by 6 July 2024 at the latest. From 1 January 2024, large-scale enterprises, including banks, insurers and listed companies with more than 500 employees, are required to collect ESRS data for reporting in 2025.
In 2025, the obligation extends to all large enterprises, listed or not, that meet two of the three criteria (250+ employees, assets > 25 million, net turnover > 50 million). Reporting on 2025 is required in 2026.
From 1 January 2026, small listed SMEs must collect their sustainability information. In addition, standards for limited assurance will be introduced from 1 October 2026. This means that checks will be carried out on a sample basis, resulting in a moderate to low level of confidence in the accuracy of the information.
In 2028, large or listed subsidiaries and branches with a net turnover of more than 40 million euros must in certain cases publish a separate sustainability report for the entire group outside the EU or EEA.
Furthermore, checks on the accuracy of information will be strengthened through the introduction of reasonable assurance, which will take effect from 1 October 2028. This will require companies to report their information more strictly according to the rules, leaving less room for errors and misinformation.
This evolution not only underlines the need for transparency, but also places greater responsibility on companies to communicate their sustainability efforts. Companies, even if they are not currently subject to CSRD rules, must ascertain whether (potential) partners are subject to reporting obligations. Sharing information on the value chain, stakeholder analysis and materiality assessment with these partners becomes essential in maintaining these supplier and customer relationships.
These steps towards sustainability reporting are a sign of growing pressure on companies to demonstrate their contribution to a sustainable future. It is vital for companies to understand and implement these changes in a timely manner in order to comply with increasingly stringent standards for financial reporting and sustainability.
Kroll SR offers comprehensive support in the field of sustainability reporting, with full programmes for CSRD-compliant reporting for your organisation. Our services include not only the preparation and execution of a double materiality assessment, the foundation of CSRD reporting, but also extend to ESG reporting to clearly communicate the annual ESG impact of your organisation to stakeholders. In addition, we offer various supplementary services, such as ESG strategy advisory, report editing and graphic design for annual reports.
Want to learn more? Contact Kroll SR.
