Enthusiastics CSRD business meeting

Corporate Sustainability Reporting Directive

Corporate Sustainability Reporting Directive will transform EU’s business landscape

The Corporate Sustainability Reporting Directive (CSRD) 1 , along with the European Sustainability Reporting Standards (ESRS), significantly drives organisational change and strategic development to boost the green transition within more than 50,000 companies over time. It has been designed to align sustainability (non-financial) information with financial information through balancing harmonisation and standardisation.

The Corporate Sustainability Reporting Directive (CSRD) 2  is a regulation under the European Green Deal. The directive answers to investors’ need for harmonised ESG disclosures and is meant to help drive capital to sustainable investments. This directive levels the playing field of publicly disclosed sustainability information across the value chain and is designed to drive profound transformation in companies across all ESG areas.

The CSRD is much more detailed than other reporting frameworks, such as its predecessor, the Non-Financial Reporting Directive (NFRD) 3 . Data and claims must be included in the annual management report and require third-party limited assurance. The data must be digitally tagged to enable investors to scrape and collect it efficiently. Consequently, this is driving organisations to include non-financial information in their decision-making processes.

CSRD drives transparency and has detailed requirements for all key aspects of sustainability

The CSRD entered into force in January 2023. It amends the 2014 Non-Financial Reporting Directive (NFRD) and expands the scope of companies that must report on sustainability topics in a more regulated manner.

The growing demand for non-financial information has led to the development of the CSRD. The CSRD will expand the scope and increase the specificity of sustainability reporting requirements for companies in the EU as well as third-country companies that have significant activity in the EU market. An estimated 50,000 companies will eventually have to comply with the CSRD, and companies will become subject to reporting as predefined sets over time.

Companies subject to the CSRD will have to report according to the 12 European Sustainability Reporting Standards (ESRS). There are overlapping reporting standards and frameworks, but CSRD will require more companies to report and will be less flexible and more detailed than the NFRD to meet investor demand, e.g. requiring third-party limited assurance. Companies must report on material aspects, and the number of mandatory data points to report on is significantly expanded compared to the previous NFRD directive. The CSRD introduces the concept of double materiality: the business’ impact on people and the planet, and the financial impact on the business model 4 .

CSRD Timeline

2017: Non-Financial Reporting Directive (NFRD) becomes a law
2023: Corporate Sustainability Reporting Directive (CSRD) replaces NFRD
2024 (Jan): Reporting entities already subject to the NFRD to report their 2024 data in 2025
2025 (Jan): Large reporting entities not currently subject to the NFRD to report their 2025 data in 2026
2027 (Jan): Listed SMEs to report their 2026 data in 2027
2028 (Jan): Non-EU companies are required to report their data if conducting business within the EU

In addition, additional ESRS data points will become mandatory throughout 2026–2028.

thee people taking a photo while sitting on bicycles

How can the CSRD affect your company?

At its core, the CSRD aims to standardise ESG performance reporting for companies. However, the CSRD is about more than closing the reporting gap. It answers to the rising demand for sustainability and represents a significant shift in the financial market, promoting transparency, accountability and environmental awareness.

Regulations, such as the CSRD, give rise to the importance of non-financial performance indicators, allowing for more data-driven decision-making on all levels within organisations. Therefore, the CSRD is more than a legal obligation: it provides an opportunity for companies that want to improve their ESG performance and stakeholder engagement while creating long-term value. It ultimately empowers those who lead the transition to a sustainable and socially responsible economy through substantiation and tailored change management.

How can AFRY support you to prepare for the CSRD? Arrow pointing right

Through AFRY’s unique CSRD approach, we are able to develop a strong organisational understanding that supports our clients' transformation strategies. With our multi-step approach, strengthened by our AFRY Sustainability Transformation Tool, we evaluate the organisation’s high-level CSRD readiness to understand potential future opportunities and obstacles. In addition, double materiality assessment helps us better understand our clients' business activities and processes.

By combining these insights, we are able to support our clients with prioritisation during the CSRD gap analysis by categorising and flagging potential challenges in an early stage. Thus, we advise organisations on insight-driven and substantiated transformation journeys tailored to their business and organisational needs.

Successful and timely implementation of the CSRD provides business opportunities by: Arrow pointing right
  • Creating new investment opportunities by attracting investors interested in sustainability
  • Better identification of activities and projects that contribute to the transition towards sustainability
  • Cost reduction and efficiency gains
  • Improving company reputation and image by demonstrating a commitment to sustainability and social responsibility
  • Identifying and managing ESG risks
  • Integrating non-financial information into the decision-making space
Double materiality Arrow pointing right

Disclosure builds on the principle of double materiality, a central concept in the CSRD. Double materiality requires undertakings to assess both the impact materiality and the financial materiality of sustainability matters.

Companies should consider each materiality perspective on its own and disclose information that is material from both perspectives as well as information that is material from only one perspective.

Compliance Arrow pointing right

The EU member states will be required to ensure compliance with the directive and apply penalties where non-compliance is identified.

List of ESRS requirements mandated by the CSRD

AFRY's services for initiating CSRD preparation

Capacity building Arrow pointing right

Capacity building equips our clients with the self-sufficiency and profound understanding required to navigate the complex landscape of CSRD reporting effectively.

Gap analysis Arrow pointing right

Identifying and addressing the gaps in governance and reporting, strategy, and disclosure against the European Sustainability Reporting Standards enhances the precision and relevance of sustainability reporting.

Roadmap Arrow pointing right

A CSRD action roadmap serves as a strategic guide, aiding in identifying potential risks and opportunities associated with CSRD compliance as well as formulating the necessary steps to ensure timely and successful preparation for the CSRD implementation.

Supporting the implementation Arrow pointing right

Implementing actionable solutions contributes to the transition to a sustainable economy and puts our clients ahead of the curve. As a leading sustainability consulting and engineering firm, AFRY is a one-stop shop for those on their sustainability journey.

We combine the engineering and industry expertise of over 19,000 professionals across the AFRY with our structured and well-defined regulatory insights, allowing us to provide comprehensive organisational and digital transformation support.

This service underscores the essential value of incorporating non-financial data—already gathered due to regulatory requirements—into organisational decision-making. Leveraging our strengths, we can seamlessly translate and map diverse stakeholder information requirements to the collected data, providing our clients with a clear overview and understanding of the information to support their decision-making.

In addition, our AFRY Sustainability Transformation Tool supports our clients throughout and after their sustainability journey. Our DMA and CSRD modules are designed to provide a detailed overview of the compliance status by linking organisational processes and stakeholders with the mandatory reporting requirements. The tool utilises the power of interactive dashboarding, giving way to easy-to-use information analysis designed to highlight key information for strategic decision-making.

AFRY Sustainability Transformation Tool DMA module

The DMA module of the tool allows for the extensive identification of relevant impacts, financial risks and opportunities (IROs) for the client organisation. Combined with our DMA approach, the platform can automatically calculate applicable ESRS data points, paving the way for the next steps in the client's compliance journey.

AFRY Sustainability Transformation Tool - CSRD Gap Analysis

The ESRS Gap Analysis (part of the CSRD module) supports the compliance journey by providing a clear overview of the ESRS data status. It combines organisational information to categorise data points into three different groups: mandatory, voluntary, and temporarily omittable. This allows organisations to prioritise and accelerate the implementation or alteration of new and existing organisational processes.

We combine sustainability reporting with actionable solutions to achieve measurable impact and real, lasting change

At AFRY, we assist clients across sectors with ESRS gap analyses, double materiality assessments and tailored action plans for their implementation journey.

In addition, we provide guidance to clients seeking to embed sustainability into their strategies and daily operations, positioning them at the forefront of sustainable practices. The AFRY Sustainability Transformation Tool provides a clear implementation methodology and visualises the results to facilitate communication within the client organisation in order to engage the key people involved in the process.

The key benefits of the AFRY Sustainability Transformation Tool:

  • Simplified data analytics through interactive dashboarding

  • Powerful DMA methodology, connecting identified impacts, risks and opportunities to key ESRS data points

  • Automated ESRS data point filtering by using the DMA results, leading to time savings of approximately 10 minutes per data point.

  • Inclusion of all the latest updates to the CSRD requirements and ESRS standards as well as the EU Taxonomy and provides insights into relational links between the different acts of EU legislation

  • Powerful and flexible graphics and visualisations in charts and tables, presenting gaps and data in a pedagogic and understandable way

  • Adaptability to fit the client organisation’s graphical theme to increase recognition and facilitate gamification and dynamic interaction

With comprehensive expertise in sustainability, technical, commercial, financial and project management fields spanning various industries, we leverage this diverse skill set to empower companies to adopt and implement a broad range of sustainable solutions.

We deliver actionable strategies and solutions that surpass compliance and reporting to drive measurable impact and real, lasting change.

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Sustainability Management Consulting

We help transform your business by mitigating risks and seizing opportunities in sustainability.

Our team leverages the engineering, consulting, and industry expertise of AFRY's 19,000-strong network of professionals worldwide, helping provide world-class sustainability solutions.

For more information please contact

Tiina Kähö - Senior Principal and Head of Sustainability Management Consulting, AFRY Management Consulting

Tiina Kähö

Senior Principal and Head of Sustainability Management Consulting, AFRY Management Consulting

Contact Tiina Kähö

For sales enquiries, please complete this form. For all other enquiries, please visit our office and contacts page here.

Frequently asked questions

When will the Corporate Sustainability Reporting Directive become effective? Arrow pointing right

Starting on 1 January 2024, the first set of companies in Europe must begin reporting their environmental, social and governance (ESG) practices according to the CSRD. These companies are mandated to disclose their first CSRD-aligned report for the fiscal year of 2024 in the first quarter of 2025.

50,000+ companies will eventually have to comply with CSRD, compared to the 11,600+ that currently report under the NFRD. The disclosure requirements are detailed, including over 1,000 data points in the 12 European Sustainability Reporting Standards (ESRS) guiding future reporting.

Which companies does the CSRD affect? Arrow pointing right

All listed or non-listed large companies are subject to the CSRD if they meet two of the three following criteria:

  1. They have more than 500/250 employees (phase 1/2)
  2. Their turnover is more than €50M
  3. Their total assets' worth surpasses €25M

In addition, SMEs will need to produce reports required by the directive starting in the fiscal year of 2026.

Which metrics are disclosed? Arrow pointing right
  • Environmental, e.g. carbon emissions, water usage and waste management
  • Social, e.g. employee diversity, labour practices and community engagement
  • Governance, e.g. board composition and ethical policies


  • 1. https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en a↩
  • 2. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32022L2464 a↩
  • 3. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52013PC0207 a↩
  • 4. https://ec.europa.eu/newsroom/fisma/items/754701/en a↩