09 Nov 23

Corporate Sustainability Reporting Directive (CSRD)

Image of city with digital sustainability icons on top of buildings
Does your company fall within the scope of the CSRD?

On July 31st, 2023, the European Commission formally adopted the European Sustainability Reporting Standard (ESRS), marking a critical step towards full implementation of the Corporate Sustainability Reporting Directive (CSRD). The CSRD is an EU Directive that introduces sustainability reporting standards to further enhance the disclosure of climate and environmental data to in-scope companies across Europe.

EU member states are required to transpose the CSRD into national law by 6 July 2024, with the legislation expected to be entered into the Irish statute books by the end of 2023. The ESRS includes 12 mandatory reporting standards: two cross-cutting, five environmental, four social-related, and one governance. Companies will be required to provide digitally tagged information on sustainability which will be submitted to a central European platform.

Double Materiality Principal

CSRD obligations centre around a double materiality principal, meaning that in-scope companies are required to report both financial and impact materiality.

  • Financial Materiality: Risks companies face associated with climate change and other ESG matters.

  • Impact Materiality: The impact that operations have on climate and society.


CSRD reporting requirements will enter into force on a phased basis for all large companies established in or governed by the laws of EU member states, all EU stock exchange-listed companies and non-EU companies with a substantial level of activity in the EU.

Large companies are defined as meeting two of the following criteria:

  • At least 250 employees;

  • Annual turnover exceeding €40 million; and

  • Assets in excess of €20 million.

Phase 1Large public interest entities with more than 500 employees. Public interest entities that are parent undertakings of a large group with more than 500 employees.Reporting in 2025 for financial year commencing on or after 1 January 2024.
Phase 2All other undertakings or parent undertakings with a large group.Reporting in 2026 for financial year commencing on or after 1 January 2025.

In-scope companies will have to provide information on their value chain, which may result in out-of-scope companies receiving request requests for information with respect to sustainability reporting from larger entities who are clients.

Act Now

Companies should take action now to assess whether they fall within the scope of CSRD, either directly or indirectly through a value chain. Any companies falling in scope will also need to assess the existing level of data collection and reporting with respect to the ESRS standards currently taking place. Companies should engage with their auditors, accountants, and other trusted business advisors as they start their sustainability reporting journey.

For further information please reach out to Henry Barrett and Niamh Manning.