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EU Council approves corporate sustainability reporting directive

Following the European Parliament adoption in early November, the EU Council has approved the Corporate Sustainability Reporting Directive (CSRD). This means that around 50,000 companies will soon be required to publish detailed information on sustainability matters, including many large non-EU based entities. CSRD requires companies to disclose detailed information on their societal and environmental impacts in line with the European Sustainability Reporting Standards (ESRS).

The approval of the CSRD follows the EFRAG Sustainability Reporting Board submitting the first set of European Sustainability Reporting Standards (ESRS) to the European Commission. These standards take into consideration the input from the public consultation on the ESRS Exposure Drafts held in summer. The submission includes the cost-benefit analysis of the first set of draft ESRS. The bases for conclusions will be published in December.

This first set of 12 draft ESRS is composed of:

Cross-cutting standards:

  • Draft ESRS 1 General requirements
  • Draft ESRS 2 General disclosures

Topical standards:

  • Draft ESRS E1 Climate change
  • Draft ESRS E2 Pollution
  • Draft ESRS E3 Water and marine resources
  • Draft ESRS E4 Biodiversity and ecosystems
  • Draft ESRS E5 Resources and circular economy


  • Draft ESRS S1 Own workforce
  • Draft ESRS S2 Workers in the value chain
  • Draft ESRS S3 Affected communities
  • Draft ESRS S4 Customers and end-users


  • Draft ESRS G1 Business conduct

The new disclosure requirements will apply to all large EU companies and to non-EU companies with a turnover over €150 million in the EU. Listed SMEs will also be covered, but they will have more time to adapt to the new rules.

Next steps

The CSRD will now be turned into law in each EU state within the next 18 months.

The European Commission will consult EU bodies and Member States on the first set of draft standards, before adopting the final standards as delegated acts in June 2023, followed by a scrutiny period by the European Parliament and Council. The rules will apply between 2024 and 2028:

·       From 1 January 2024, for large public-interest companies (500+ employees) already subject to the non-financial reporting directive (NFRD), with reports due in 2025.

·       From 1 January 2025 for large companies not currently subject to the NFRD (with more than 250 employees and/or €40 million in turnover and/or €20 million in total assets), with reports due in 2026.

·       From 1 January 2026 for listed SMEs and other undertakings, with reports due in 2027. SMEs can opt out until 2028.

·       From 1 January 2028 for third-country undertakings generating a net turnover of more than €150 million in the EU and which have at least one large or listed EU subsidiary or a EU branch generating a net turnover of more than €40 million, with reports due in 2029.

EFRAG will now focus on the set two of draft ESRS which are draft sector specific standards:

  • Five sectors covered by GRI: agriculture, coal mining, mining, oil and gas
  • Five high-impact sectors: energy production, road transport, motor vehicle production, food/beverages, textiles.

Set two will include as well ESRS standards for SMEs.

For more information on changes to the reporting landscape please register for the A4S Newsletter and read our reporting webpage.

The A4S Summit will have a reporting focused day on 13th December, including a session specifically on European report. Register now via our website.

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Reporting insights

While business performance has historically been measured in financial terms, over the past two decades reporting requirements have been changing rapidly. Explore our reporting webpage with all our latest guidance.

Navigating the reporting landscape

This guide, created by the A4S Accounting Bodies Network:


  • Provides an overview of the changing corporate reporting landscape
  • Summarizes key developments in sustainability reporting and how these impact on the role of the accountant
  • Highlights how this area is likely to evolve, signposting to further resources


Stay up to date with all the latest news at A4S. Our monthly newsletter includes the latest guides, reports, stories and thought pieces from finance leaders across the globe.

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