CSRD stands for the Corporate Sustainability Reporting Directive, a regulation introduced by the European Union to enhance the transparency and reliability of sustainability information provided by companies.

The directive replaces the Non-Financial Reporting Directive (NFRD), significantly expanding the scope of companies required to report and the depth of information they must disclose. CSRD is designed to standardsze sustainability reporting across the EU, making it easier for stakeholders to compare companies' ESG performance.

The significance of CSRD lies in its ability to drive corporate accountability and promote sustainable business practices. By mandating detailed reporting on environmental, social, and governance (ESG) factors, CSRD ensures that companies not only focus on financial performance but also consider their impact on society and the environment.

This shift is critical as investors, customers, and regulators increasingly prioritise sustainability in their decision-making processes.

For companies preparing to comply with CSRD, understanding the directive’s requirements and how they differ from other regulations is essential. CSRD’s emphasis on double materiality—considering both how sustainability issues impact the company and how the company impacts the environment and society—sets it apart from many other reporting frameworks.

For a deeper dive into the directive’s specifics, download our free CSRD reporting guide here.

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