CSRD Reporting —
A Document Preparation Guide

01

What CSRD Is

The Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464, “CSRD”) is the EU’s primary legislative instrument governing non-financial disclosure. It replaces and substantially expands the scope of the former Non-Financial Reporting Directive (NFRD), requiring companies to report detailed, audited sustainability information as part of their annual management report.

CSRD mandates reporting across environmental, social, and governance (ESG) dimensions using standardised European Sustainability Reporting Standards (ESRS), developed by the European Financial Reporting Advisory Group (EFRAG) and adopted by the European Commission.

02

Who Must Report

CSRD applies to EU-incorporated companies meeting specific size and listing criteria. The thresholds are determined by a combination of employee count, net turnover, and balance sheet total:

A company satisfies the “large” threshold if it exceeds at least two of the three financial/size criteria in two consecutive financial years.

03

Non-EU Companies: The Third-Country Provision

Article 40a of CSRD introduces reporting obligations for non-EU parent companies — a provision with significant implications for multinationals headquartered outside Europe.

A non-EU company is subject to CSRD consolidation-level reporting if it meets both of the following conditions:

• it generates net turnover exceeding €150 million in the EU for each of the last two consecutive financial years; and
• it has at least one large EU subsidiary (meeting the large-company thresholds) or an EU branch generating net turnover exceeding €40 million.

In such cases, the non-EU parent must publish a sustainability report covering the entire group, prepared in accordance with the standards adopted under CSRD or equivalent standards recognised by the European Commission. The report must be filed with the relevant EU member state authorities through the applicable EU subsidiary or branch.

04

Reporting Timeline

CSRD applies in phases. The first cohort of companies — large public-interest entities previously subject to NFRD — published their first CSRD-compliant reports in 2025, covering financial year 2024.

• 2025 — First CSRD reports published (FY 2024) by large PIEs with 500+ employees.
• 2026 — Other large EU companies report for FY 2025.
• 2027 — Listed SMEs report for FY 2026 (subject to opt-out provisions).
• 2029 — Non-EU parent companies with significant EU presence report for FY 2028.

Companies should begin preparation well in advance of their first reporting year. The data collection, internal governance, and documentation requirements typically require 12 to 24 months of preparation for a company with no prior ESG reporting infrastructure.

05

What Must Be Disclosed

CSRD requires disclosure of information necessary to understand a company’s impacts on sustainability matters, and how sustainability matters affect the company’s development, performance, and position. This dual-materiality principle is central to the reporting framework.

Environmental Information

• Climate change mitigation and adaptation strategies; greenhouse gas emissions (Scope 1, 2, and 3).
• Energy consumption and transition to renewable sources.
• Water and marine resources use.
• Biodiversity and ecosystem impact.
• Pollution (air, water, soil, substances of concern).
• Circular economy practices: resource use, waste management.

Social Information

• Own workforce: working conditions, wages, collective bargaining, health and safety, diversity and inclusion.
• Value chain workers: working conditions throughout the supply chain.
• Affected communities: local community impact, indigenous peoples’ rights.
• Consumers and end-users: product safety, data privacy, responsible marketing.

Governance Information

• Role of administrative and supervisory bodies in sustainability oversight.
• Business conduct: anti-corruption, anti-bribery, lobbying, supplier relationships.
• Management of sustainability-related risks and opportunities.
• Sustainability-linked remuneration policies.

All disclosures must be prepared in accordance with the applicable ESRS and included in the company’s management report. The report must be made available in a machine-readable format (XHTML with iXBRL tagging) to enable automated processing by the European Single Access Point (ESAP).

06

European Sustainability Reporting Standards (ESRS)

The ESRS are the mandatory reporting standards under CSRD, adopted by the European Commission via delegated acts. They specify the disclosure requirements, data points, and presentation format for each sustainability topic.

Cross-Cutting Standards

• ESRS 1 — General requirements: materiality assessment, value chain scope, time horizons, due diligence integration.
• ESRS 2 — General disclosures: governance, strategy, impact, risk and opportunity management, metrics and targets.

Topical Standards

• Environmental: ESRS E1 (Climate change), E2 (Pollution), E3 (Water and marine resources), E4 (Biodiversity and ecosystems), E5 (Resource use and circular economy).
• Social: ESRS S1 (Own workforce), S2 (Workers in the value chain), S3 (Affected communities), S4 (Consumers and end-users).
• Governance: ESRS G1 (Business conduct).

ESRS 2 is mandatory for all in-scope companies. The topical standards apply subject to a materiality assessment — a company need not report on a topic if it concludes, on the basis of a documented assessment, that the topic is not material to its business.

07

Required Documentation

CSRD compliance generates a substantial documentary record. The following documents form the core of a compliant reporting package:

Materiality Assessment Report

A documented assessment identifying which sustainability topics are material to the company from both an impact perspective (effects on people and environment) and a financial perspective (effects on business performance). This assessment determines which ESRS topical standards apply and must be disclosed as part of the sustainability report.

Sustainability Report (Management Report Section)

The primary disclosure document, incorporated into or appended to the company’s annual management report. Must cover all material ESRS topics with quantitative and qualitative disclosures, including metrics, targets, and policies. Must be prepared in XHTML format with iXBRL tagging for machine readability.

Value Chain Mapping Documentation

A structured record of the company’s upstream and downstream value chain, identifying material impacts, risks, and opportunities at each stage. Required to support Scope 3 emissions disclosures and social value chain reporting under ESRS S2.

Due Diligence Process Documentation

Documentation of the company’s ongoing processes for identifying, assessing, preventing, mitigating, and monitoring actual and potential adverse impacts on people and environment — aligned with the UN Guiding Principles on Business and Human Rights and OECD Guidelines.

Transition Plan Documentation

Where the company has adopted a climate transition plan (required disclosure under ESRS E1), supporting documentation demonstrating alignment with the Paris Agreement 1.5°C pathway, interim targets, and financing commitments.

Limited Assurance Engagement Documentation

CSRD requires sustainability reports to be subject to limited assurance by an accredited auditor or assurance provider. Preparatory documentation — including evidence supporting disclosed data points — must be maintained and made available for the assurance engagement.

08

Consequences of Non-Compliance

CSRD does not establish EU-level penalties directly — enforcement is delegated to member states, which are required to designate competent authorities and establish effective, proportionate, and dissuasive sanctions.

Member state penalty regimes vary but typically include:

• administrative fines for failure to publish a sustainability report or for materially incomplete or inaccurate disclosure;
• publication orders and compulsory correction of defective reports;
• personal liability for directors and supervisory board members where non-compliance results from governance failures.

Beyond regulatory sanctions, non-compliant companies face material commercial risks: exclusion from public procurement, restricted access to EU-regulated financial markets, reputational damage with investors and business partners increasingly relying on ESG disclosures for due diligence and credit assessment, and supply chain pressure from in-scope companies required to collect value chain data from their suppliers.

09

Next Steps for Your Business

A structured approach to CSRD readiness typically proceeds in four stages:

1. Scoping and gap analysis. Determine whether your company falls within CSRD scope, identify the applicable first reporting year, and assess existing ESG data collection and reporting infrastructure against ESRS requirements.
2. Materiality assessment. Conduct and document a double materiality assessment across all ESRS topical areas, identifying which topics require full disclosure and which may be omitted with documented reasoning.
3. Documentation and report preparation. Prepare the materiality assessment report, value chain mapping, due diligence documentation, and the sustainability report itself — structured to ESRS requirements and formatted for iXBRL tagging.
4. Assurance readiness. Compile and organise the supporting evidence required for the limited assurance engagement, and establish ongoing data collection processes for subsequent reporting years.

Companies with no prior ESG reporting infrastructure should allow at least 18 months of preparation time. Early engagement with the materiality assessment process is critical, as its outcomes determine the full scope of disclosure obligations.