🇪🇺European Union
CSRD compliance in the EU
The CSRD (Directive 2022/2464) replaces the NFRD and requires nearly 50,000 companies to report on sustainability using the 12 ESRS standards covering environmental (E1-E5), social (S1-S4), and governance (G1) topics with double materiality assessment.
Enforcement authority
EFRAG (standards development) + national securities regulators + independent auditors (OTI)
Maximum sanctions
Determined by each member state. Can include administrative fines, public statements, director liability, and injunctions. ESMA coordinates cross-border enforcement.
Key obligations
What CSRD requires from organizations operating in the EU.
Report on all 12 ESRS standards applicable after double materiality assessment
Obtain limited assurance from an independent third-party auditor (OTI), moving to reasonable assurance by 2028
Tag sustainability reports in iXBRL format for machine readability
Report on value chain impacts including upstream suppliers and downstream activities
Include transition plans and targets aligned with the Paris Agreement
Local context in the EU
Phase 1 (FY 2024) covers large listed companies; Phase 2 (FY 2025) all large companies; Phase 3 for listed SMEs has been delayed by 2 years to FY 2028. EFRAG continues to publish interpretive guidance and sector-specific standards.
Frequently asked questions
How does CSRD apply in the EU?
The CSRD (Directive 2022/2464) replaces the NFRD and requires nearly 50,000 companies to report on sustainability using the 12 ESRS standards covering environmental (E1-E5), social (S1-S4), and governance (G1) topics with double materiality assessment.
Who enforces CSRD in the EU?
EFRAG (standards development) + national securities regulators + independent auditors (OTI)
What are the penalties for CSRD non-compliance?
Determined by each member state. Can include administrative fines, public statements, director liability, and injunctions. ESMA coordinates cross-border enforcement.
CSRD in other jurisdictions
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