The new European directive on sustainability reporting affects many companies. Large companies, SMEs, number of employees, turnover… who is concerned by the CSRD? Let’s take stock of the changes brought about by this new directive and its interest for society.
CSRD: what is it?
The CSRD, for Corporate Sustainability Reporting Directive, is a new European directive which will come into effect from 2024. It will in fact replace the NFRD that you may already know: the Non Financial Reporting Directive.
The CSRD will now oblige more than 50,000 companies in Europe to draw up extra-financial reporting concerning their CSR implicationsi.e. environmental, social and societal.
Compared to the NFRD, the CSRD makes it possible to extend the CSR reporting requirement to a larger number of companies and to collect much more complete and precise information.
You will find the agenda of the CSRD Directive here.
Now let’s move on to the companies affected by the CSRD.
CSRD: SMEs and large listed companies concerned
Listed companies are the first to be affected by this new directive. These are therefore large companies listed on the European markets (concerned from 2025 for the 2024 financial year) but also SMEs listed on the stock exchange (from 2027 for the 2026 financial year).
To be concerned, listed SMEs must exceed two of the following three thresholds:
- A bilan of 350,000 euros;
- A net turnover of 700,000 euros;
- 10 employees (on average over the financial year).
These companies may, however, apply for an exemption for the financial years preceding the year 2028, which must be justified in the reporting.
Three thresholds for the large companies and SMEs concerned
The thresholds are also widened for large unlisted European companies. If the NFRD only concerned large companies with more than 500 employees, the CSRD concerns all companies that meet two of the following three conditions:
- Have more than 250 employees;
- Have a balance sheet greater than 20 million euros;
- Have a turnover of more than 40 million euros.
The CSRD therefore concerns many more European companies than the NFRD did, but not only. It also concerns non-European companies with an annual turnover of more than 150 million euros on the EU market. This also concerns the subsidiaries of these groups, which will have to communicate on the CSR approach of their parent company.
Even if there is no obligation for other companies such as SMEs, SMEs or unlisted entities, the EU also encourages them to publish their own extra-financial information according to specific standards specified in the new directive.
CSRD: what interest?
Many more companies are called upon to write and publish detailed reports concerning their ecological and social impacts. By making these values and actions a standard, the CSRD encourages all organizations to commit to sustainable development. It also makes visible the efforts and progress of companies in terms of sustainable development.
Indeed, the CSRD pushes for transparency and accessibility of information related to sustainability, while fighting against greenwashing. We are dealing here with a growing demand from consumers as well as with values and needs that are essential to our society.
To go further and adapt your company to this new CSRD directive, Nicomak can accompany you during a dedicated training session.