The impact of the CSRD directive on businesses

The CSRD directive (Corporate Sustainability Reporting Directive) is a crucial development in the context of the ecological transition of European companies. As a new standard, it imposes sustainability reporting requirements, directly impacting corporate governance and transparency. This article explores the CSRD directive in detail, its gradual application, and its impact on businesses.

What is the CSRD directive?

The CSRD, or Corporate Sustainability Reporting Directive, is a European Union directive that replaces the NFRD (Non-Financial Reporting Directive). Its objective is to reinforce the transparency obligations of companies regarding their sustainability performance. Unlike NFRD, CSRD applies to a much larger number of businesses, including all large and publicly traded companies. This framework aims to improve the comparability, reliability, and relevance of ESG (environmental, social, and governance) information published by companies.

A wider field of application

One of the major changes introduced by the CSRD is the broadening of its scope of application. While the NFRD only concerned a limited number of companies, the CSRD will now apply to all large companies, as well as to listed companies, with the exception of micro-enterprises. This means that many businesses that were not previously subject to these reporting obligations will now have to comply with them. According to the AMF, this directive imposes specific disclosure requirements, in particular on governance, environmental impact and social risks.

Stronger reporting requirements

The CSRD requires companies to publish detailed information about their sustainability practices, including their environmental, social and governance (ESG) impact. This reporting should be verified by an independent third party, which reinforces the credibility of the information provided. The directive also introduces a standardized reporting framework, making it easier to compare performance between companies. This represents a major development for businesses, which will need to prepare for more rigorous controls and increased expectations of transparency.

Progressive application of the Directive

As stated by the government, the implementation of the CSRD will be gradual, with specific deadlines depending on the size and type of companies:

• January 1, 2024: Businesses already subject to NFRD will start complying for the year 2024. This concerns companies that meet at least two of the following criteria: more than 500 employees, more than €50 million in turnover, or more than €25 million in balance sheet total.
• January 1, 2025: Mid-sized companies, meeting at least two of the following criteria: more than 250 employees, more than €50 million in turnover, or more than €25 million in balance sheet total, will have to start complying by the year 2025.
• January 1, 2026: SMEs listed on the stock exchange, with the exception of micro-enterprises (less than 10 employees, a balance sheet of less than €450,000, or a net turnover of less than €900,000), will have to comply for the year 2026.

This gradual application aims to allow businesses to adapt to new requirements.

Conclusion

The CSRD directive represents a big change in the way European businesses will have to approach sustainability and transparency. By imposing stricter standards, it pushes companies to integrate sustainability at the heart of their strategy, while strengthening their credibility with stakeholders. For businesses, it is essential to prepare now in order to meet these new requirements.

To find out more about how your business can prepare for the CSRD directive thanks to the CleanMob telematics solution, without installing a box, contact us today for a personalized exchange.

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