{"id":6233,"date":"2023-03-13T14:32:00","date_gmt":"2023-03-13T14:32:00","guid":{"rendered":"https:\/\/iqeq-staging.j.layershift.co.uk\/?p=6233"},"modified":"2023-05-15T13:57:41","modified_gmt":"2023-05-15T13:57:41","slug":"how-prepare-upcoming-csrd-disclosure-requirements","status":"publish","type":"post","link":"https:\/\/iqeq.com\/insights\/how-prepare-upcoming-csrd-disclosure-requirements\/","title":{"rendered":"How to prepare for the upcoming CSRD disclosure requirements"},"content":{"rendered":"
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Large companies in the EU have been required to make sustainability disclosures under the Non-Financial Reporting Directive (NFRD) since 2018. But on 5 January 2023, Europe\u2019s\u00a0Corporate Sustainability Reporting Directive (CSRD)<\/a>\u00a0entered into force. The new regulation is designed to expand the scope and reporting requirements of NFRD, most notably extending its reach to more companies.\u00a0Per the regulator<\/a>, \u201cA broader set of large companies, as well as listed SMEs, will now be required to report on sustainability\u2014approximately 50,000 companies in total.\u201d<\/p>\n

Starting with reports generated in 2025 for fiscal year 2024, companies currently under the scope of NFRD will begin reporting. From 2026 for fiscal year 2025, more large companies will be required to make sustainability disclosures to EU regulators than ever before. While the initial threshold applies to large companies, small- to medium-sized companies will come into scope in 2027 for 2026 reports.<\/p>\n

The new directive represents a significant lift for compliance teams, which must begin preparations now for the reporting rules on the horizon. In addition to required disclosures, the new rules also introduce a mandatory audit and assurance regime to sidestep attempts at greenwashing.<\/p>\n

As with the\u00a0recent updates to SFDR, CSRD\u2019s updated reporting rules are intended to ensure that investors have access to the information they need to assess sustainability-related investment risks. The European Commission also cites a stated objective to \u201ccreate a culture of transparency about the impact of companies on people and the environment.\u201d<\/p>\n

Which companies will be impacted by CSRD?<\/h2>\n

As mentioned above, an estimated 50,000 companies are expected to fall under CSRD. Fewer than 12,000 were required to report under NFRD, so this change represents a massive increase. In its initial phase, CSRD will apply to all large companies\u00a0 that exceed at least two of the following benchmarks:<\/p>\n