New Directive will standardise Sustainability Reporting across the EU

New EU Directive will help prevent greenwashing and bring sustainability reporting to an audited & assured standard. IN June 2023 there was a confirmation of detailed reporting standards around the Corporate Sustainability Reporting Directive (CSRD). The directive will replace the EU’s legacy ESG Reporting programme NFRD and will set a standard of carbon reporting and auditing that is robust and comparable to the quality and control implemented in financial reporting. Companies will need to bring a new level of diligence to their ESG reporting in order to comply with these regulations. The CSRD will require full carbon emissions reporting for 50,000 EU businesses and 10,000 non-EU companies with significant EU operations.

The CSRD will affect Medium and Large Businesses that have European Operations

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It will become vital that companies prepare themselves by building out audit-ready reporting infrastructure & setting clear sustainability goals.

The CSRD increases the breadth of sustainability reporting as it incorporates pollution, water, and biodiversity. It also increases the scope of the companies that are subject to the directive, which include all companies that have 2 or more of the following, 250+ employees, €40m+ annual revenue, €20m+ balance sheet.

Csrd farming carbon

Double Materiality is when you understand which elements of ESG will benefit your business Environmental & Economic Bottom Line

A key element of the CSRD is the inclusion of double materiality, which will involve recognition of how company operations affect people and the environment, and also how sustainability related developments will impact the organisation. Company stakeholders will evaluate risks and opportunities across the topics covered by CSRD and include some metrics based measurements to clarify understanding of materiality.

Regardless of the findings of the materiality assessments, all companies in scope will have to baseline their climate reporting, including full scope 1-3 emissions, alongside a climate risk assessment and any policies related to climate change mitigation and adaption. Further reporting will depending on material risk, and could include other standards, water, pollution and biodiversity metrics to be included within an organisations mandatory disclosures.

Csrd man in suit farming carbon

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The CSRD is closely linked to the EU Green Taxonomy, a classification system that establishes a list of environmentally sustainable economic activities. Companies within the scope of the CSRD will also have to comply with the taxonomy. Reporting on both regulations will be in companies’ annual sustainability reports.

For businesses of all sizes, the reporting standards and lists of acronyms makes embracing sustainability harder work than it needs to be.

If you would like to find out more about how your business can start to understand, baseline & improve your ESG position - Reach out to Steph at Farming Carbon. E-mail: