The Corporate Sustainability Reporting Directive (CSRD) is a landmark regulation adopted by the European Union to enhance corporate transparency and accountability on environmental, social, and governance (ESG) matters. It significantly expands the scope and depth of sustainability reporting requirements for companies operating in the EU. Replacing the Non- Financial Reporting Directive (NFRD), CSRD mandates that large companies—including listed SMEs over time—report on their sustainability risks, impacts, and performance in alignment with the European Sustainability Reporting Standards (ESRS).
Under CSRD, companies must disclose information on climate change, biodiversity, human rights, supply chain due diligence, resource use, and more, ensuring that sustainability information is as reliable and consistent as financial data. The directive aims to provide investors, consumers, and stakeholders with comparable, relevant, and verified sustainability data, helping to redirect capital towards more sustainable business practices. It supports the EU’s broader goals of promoting sustainable finance, achieving climate neutrality, and fostering responsible corporate behavior across the economy.
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