When is CSRD reporting required for my business?

The Corporate Sustainability Reporting Directive (CSRD) was introduced by the European Union in 2022 to promote sustainability and transparency within companies. While the need for businesses to be more sustainable is clear, decoding the legal jargon and figuring out the exact details can be confusing.

But when is CSRD reporting required, exactly?

Well, this article will break down the timelines and requirements, explaining who needs to comply and when. We’ll cut through the complexity and provide clear answers to help you understand this new regulation, as well as explain its goals and shed light on its potential challenges and benefits for businesses.

So, when is CSRD reporting required for my company?

The CSRD is already changing how companies report on their environmental, social, and governance (ESG) performance. These new rules apply to different types of companies, and the reporting deadlines vary depending on company size and classification.

Large companies with more than 500 employees, including those already subject to the previous Non-Financial Reporting Directive (NFRD), are taking the lead in adopting the CSRD. They have a bit of a head start, as they already have experience reporting on sustainability.

These companies will need to start complying with the new CSRD requirements in their 2025 reports, which will cover their 2024 financial year.

Another group of large companies also needs to get ready for the CSRD. This includes businesses meeting two of the following criteria:

• Over 250 employees: includes all personnel who work for the company, regardless of their location;
• €50 million in annual revenue: the total amount of money the company earns from its sales each year;
• €25 million in assets: the total value of the company’s assets, including things like buildings, equipment, and investments.

These companies will need to start reporting under the CSRD in 2026, covering their 2025 financial year.

Smaller companies aren’t off the hook either! Listed small and medium-sized enterprises (SMEs) will need to start reporting under the CSRD in 2027, with reports covering the 2026 financial year. They have the option to opt out of reporting until 2028, giving them some extra time to get ready.

Finally, non-EU companies with a large presence in the EU – meaning those with more than €150 million in EU turnover and at least one subsidiary or branch in the EU meeting certain criteria – will need to start complying with the CSRD in 2029.

Why the CSRD reporting is required

Now that you know when your company will have to start reporting under the CSRD, let’s take a closer look at what it is and why it’s so important. 

The Corporate Sustainability Reporting Directive (CSRD) introduces new EU rules to foster corporate sustainability and transparency regarding a company’s impact on the environment, society, and its own governance (ESG). It expands upon the existing NFRD and aims to standardize and strengthen sustainability reporting.

The CSRD requires companies to report on a range of ESGH factors. This includes things like:

• Environmental impact: companies must disclose their energy consumption, water use, waste management practices, greenhouse gas emissions (direct or otherwise), and the company’s impact on biodiversity and ecosystems;
• Social impact: relates to how companies treat their employees, their impact on human rights, and their relationships with local communities;
• Governance: this elusive term refers to how companies are managed and structured, so businesses must also report on their board structure, business ethics, risk management procedures, and anti-corruption measures.

The CSRD also emphasizes the importance of reporting on material issues. This means that companies should focus on the ESG factors that are most relevant to their business and stakeholders. 

This transparency is crucial for investors, customers, and other stakeholders who want to understand a company’s impact on the world. The CSRD helps hold companies accountable for their environmental and social performance, pushing them to take action to address their impact.

It also helps set a new standard for sustainability reporting, encouraging companies to take more significant steps towards a greener future. And we can’t ignore how the data collected for reporting provides valuable information that can be used to make better decisions about investments, policies, and business practices.

In a world where climate and environment-related issues are becoming more important every day, it’s always good to know the CSRD closely aligns with the Paris Agreement’s goal, which aims to limit global warming.

In other words, the CSRD is a significant step towards a more sustainable future for businesses and the planet. With comprehensive and standardized ESG reporting being required, stakeholders are better equipped to make informed decisions and drive companies to integrate sustainability into their core strategies.

The potential impacts of CSRD on your businesses

In short, the CSRD is a game-changer for businesses. Sure, it may bring new requirements and responsibilities, but it also presents opportunities to shape a more sustainable future. Companies will likely need to adjust their internal processes and invest in new systems to gather and report the necessary data.

This can mean updating data collection methods, investing in new technologies, or adjusting internal processes to track their environmental and social impact. There may be new costs associated with these changes, and companies will need to adapt to ensure compliance.

These regulations are a big shift for businesses, and it’s not all about paperwork. While there’s definitely a new reporting burden, it also opens up some real opportunities. If companies can really get serious about sustainability, they can find some surprising benefits.

For example, taking sustainability seriously can help companies save money. By being more efficient with resources, reducing waste, and using less energy, companies can cut costs in the long run.

Today, people are paying more attention to how companies treat the environment and their employees. Companies with a strong sustainability record often attract investors and customers who value businesses making a positive impact. This can give them a real competitive edge.

Beyond financial benefits, being a sustainable business helps attract talent, build stronger customer loyalty, and gain the trust of investors seeking a responsible approach – there’s a lot to gain from going all-in on sustainability!

The next steps for your business are here.

The CSRD makes it clear: sustainability is no longer just a trend, it’s a requirement for businesses of all sizes. Understanding the timeline, the requirements, and the potential impact will help you shape your company’s future. It’s time to take stock, get organized, and start collecting the data you need to meet these new regulations.

Don’t wait until the last minute – proactive planning is key to success. The sooner you begin, the more prepared you’ll be to meet the reporting deadlines and showcase your commitment to a sustainable future.

Datanet IoT is your trusted partner for all your asset and environmental monitoring needs. We offer a range of cutting-edge solutions that can make CSRD reporting simpler and more efficient. Our precise emissions trackers help you accurately report on your Scope 1, 2, and 3 emissions, ensuring compliance for years to come.

But we don’t stop there! We also provide a diverse selection of trackers and sensors for monitoring machinery, environmental conditions, and even oceanographic equipment. This real-time data can enhance operational efficiency and ensure your valuable assets operate at peak performance.

Ready to unlock the potential of accurate environmental and asset data? Get in touch with Datanet IoT today and let us help you achieve your sustainability goals!