GRI Launches New ‘CSRD Essentials’ Publication explaining the EU’s mandatory sustainability reporting requirements

On 15 May 2024 a new guidance document titled CSRD Essentials: the definitive guide to the EU Corporate Sustainability Reporting Directive was jointly published by GRI (Global Reporting Initiative) and the EU EFRAG on the implementation of the Corporate Sustainability Reporting Directive (CSRD), the legislation adopted by the EU in December 2022 and now in effect.

GRI is the independent, international organisation that helps businesses and other organisations take responsibility for their impacts, by providing them with the global common language to communicate those impacts.

It should be noted that the European Sustainability Reporting Standards (ESRS), which are mandated within the CSRD, are closely aligned with the widely used GRI Standards in relation to ESG impacts, and cement GRI’s role in making sustainability reporting universal, accessible and beneficial for all stakeholders.

The CSRD expands on the now defunct NFRD (Non-Financial Reporting Directive) and looks to address key structural weaknesses in current ESG regulation reporting. Under the CSRD, more than 42,500 EU-based companies, plus several thousand businesses outside the EU, are required to report on both how sustainability issues affect corporate performance and how business activities impact society and the environment.

The Directive means increased sustainability reporting requirements and data collection – steps that are proving to be very challenging for many reporting companies.

Each company within scope is required to report more broadly on sustainability-related topics, including environmental issues such as climate change, biodiversity and pollution, social responsibility, respect for human rights, anti- corruption measures and board diversity. Entities also need to report on how environmental and social matters influence their development – termed “double materiality”.

Companies that meet two of the following three criteria must comply with the CSRD:

• More than €40 million in net turnover.
• Balance sheet total assets are greater than €20 million.
• 250 or more employees.

In addition, non-EU companies with a turnover of at least €150 million in the EU over two consecutive years must comply.

The new rules will apply for the first time in financial year 2024 for reports that will be published in 2025. The CSRD will cover all listed companies in EU-regulated markets (except listed micro-enterprises).

The CSRD Essentials guidance document simplifies key aspects of the CSRD and encapsulates 11 core briefings that explain the CSRD in accessible language.

The CSRD Essentials guide which is 45 pages in length includes content on:

• Scope, timing and interactions with existing standards.
• Reporting format: the CSRD integrates sustainability within annual reporting, combining financial and non-financial data. It also promotes digital reporting, to ensure consistency and accessibility.
• Legal interconnections, auditing rules and internal supervision: the CSRD integrates with existing EU regulations – including the European Climate Law and the Corporate Sustainability Due Diligence Directive (CSDDD). It also mandates third-party sustainability assurance, emphasises materiality assessment and requires audit roles to be assigned.
• Reporting format that companies will have to meet to draft their reports.
• Consolidation of subsidiaries.
• Reporting by third-country companies including reporting obligations.
• Small and Medium Enterprises (SMEs), implementation procedures, and penalties: the Directive extends reporting to SMEs, easing compliance through transition periods and simplified standards.
• National implementation and penalties.

The document guides organisations who lie within the scope of the Directive through the sustainability reporting journey, helping them better understand the spirit of the law and is available at the following location here GRI.

Antaris is currently supporting several organisations with their sustainability reporting requirements. To learn more about what we do, please visit our website.