Corporate Sustainability Reporting Directive

What is CSRD?

Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (CSRD) is a new directive from the EU set to take effect in 2024, replacing the current Non-Financial Reporting Directive (NFRD). The directive mandates that companies disclose detailed and transparent information about their social and environmental activities. Its aim is to enhance and expand the framework for corporate sustainability reporting. The objective is to standardize and create more consistency and transparency in companies' sustainability reporting, allowing for comparisons between different businesses and facilitating the assessment of their sustainability performance. This includes detailed reporting on aspects such as working conditions, climate impact, human rights, and anti-corruption efforts. CSRD requires the measurement of the impact of products leaving the company and the impact of items or services brought into the company. In simple terms, it seeks to assess how the business influences the environment and how the environment influences the business. 

The aim of CSRD is to enhance the comparability of sustainability information reported by companies, to support the overarching sustainability and climate goals of the EU, to promote the integration of sustainability aspects into corporate decisions and strategies, and to create an honest and transparent sustainability landscape based on relevant and accurate data. CSRD also aims to facilitate stakeholders such as investors, consumers, and organizations in assessing the social and environmental impacts of companies. By providing sustainability information to financial markets, conditions for promoting sustainable growth can be established. The new regulation also aims to benefit individual companies. Reporting can facilitate financing while simultaneously raising awareness within the company regarding its own risks and opportunities related to sustainability. The information is to be integrated into the annual report, with requirements for external review and audit. This creates conditions to ensure that the report is reliable, relevant, and comparable. 

To meet the requirements of CSRD, not only quantitative data is required but also an in-depth collection of primary data. Companies are now urged not only to review their own processes but also to obtain environmental data about the products they purchase through product life cycle analyses (product LCA). 

CSRD encompasses all large companies either governed by EU legislation or listed within the EU, as well as those established in any of the EU member states. This scope also extends to global companies operating in the European market.

Starting from January 1, 2024, it becomes mandatory for these companies to adhere to CSRD and incorporate its guidelines for measurement and reporting in their annual reports for the fiscal year 2024. The first annual report fully in line with CSRD standards must be published no later than 2025.

For large companies currently not covered by NFRD, there is an additional timeline to consider. Starting from January 1, 2025, these companies are obligated to adopt CSRD and integrate its requirements for measurement and reporting into their annual reports for the fiscal year 2025. The first annual report meeting CSRD requirements is expected to be published no later than 2026.

To clearly define which companies fall under CSRD, they must meet at least two of the following three criteria:
  • Net revenue of 40 million euros or more

  • Balance sheet of 20 million euros or more 

  • 250 or more employees

The introduction of CSRD represents a significant milestone for companies in Sweden, opening up opportunities for improvement in sustainability efforts. We see this as a positive development where increased clarity and heightened reporting requirements constitute a step in the right direction to seamlessly integrate sustainability into all operations. This opens the door to a more responsible future where sustainability efforts are not just a part of companies' reporting but an integrated and essential aspect of the business strategy. Therefore, CSRD is not just a consequence of requirements but rather an opportunity to effect real change and make sustainability a fundamental driving force for companies in Sweden. 
CSRD is here to stay and has come to bring about change. Even though the directive currently does not apply to smaller companies, it will. Small and medium-sized enterprises will be subject to CSRD by 2027 at the latest, and it is important to measure and prepare as the directive requires as much primary data as possible. 

Do you want to know how we can assist you with energy data for CSRD reporting?

With DAZOQ EI, you get real-time data on your energy usage and can use it to demonstrate how you are working on energy efficiency in your industry.

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