The CSRD has impacts on companies of all sizes

The Corporate Sustainability Reporting Directive (CSRD) entered into force at the beginning of 2024. Sustainability reporting provides an overview of a company’s environmental, social and financial responsibility. Sustainability reporting provisions apply to large companies, small listed companies and medium-sized listed companies (with some exemptions for medium-sized and small companies). With the CSRD, sustainability reporting will gradually become a mandatory part of companies’ financial statements.

Sustainability reporting involves reporting on material topics related to companies’ operations, and it also covers mandatory topics such as climate change. For example, the following aspects are reported on:

• The company’s strategy and its sustainability targets with timelines
• Description of the structure of the board of directors and the management and their role in matters related to sustainability
• Description of the company’s policies and their implementation
• Key performance indicators

Although the reporting obligation applies only to the largest companies, sustainability reporting will have an impact on almost all companies’ reporting needs. Companies need different types of information from their stakeholders when compiling data to be reported, and therefore the need to collect data affects a much larger group of companies.

Some companies may also report sustainability data for marketing and image purposes even if they are not required by law to report. This means that even smaller companies should study the topic in good time and be prepared for the fact that a partnership with a company covered by the reporting requirement may mean new responsibilities in the future.

The reporting obligation for companies will be implemented gradually between 2024 and 2028. Has your company already prepared for it? Have you mapped out all the things that should be considered and figured out if your systems support sustainability reporting?