Key points

The final EU Corporate Sustainability Reporting Directive (CSRD) has been published in the EU Official Journal and comes into force on 5 January 2023.
  • On 16 December 2022, after adoption by the European Parliament and the Council of the EU, the final Directive has been published in the EU Official Journal.
  • EU Member States are given a period of 18 months to transpose the Directive into their own national laws.
  • The final Directive confirms the outcome of the provisional political agreement reached in June 2022.
  • The CSRD regulates extensive new sustainability reporting requirements that are expected to affect many companies based inside, but also outside, the EU.
  • The first companies within the scope of the CSRD will have to apply the new sustainability regime starting FY 2024.
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What is the issue?
In April 2021, against the background of the European Green Deal, and with the ultimate goal of reaching climate neutrality by 2050 in the EU and the ambitious Sustainable Finance Strategy, the European Commission published its proposal, the Corporate Sustainability Reporting Directive (CSRD). The objective of the CSRD is to fundamentally revise and strengthen the non-financial reporting rules introduced by the 2014 Non-Financial Reporting Directive (NFRD). After the release of the CSRD proposal and several months of political trilogue discussions, a provisional agreement between the European Parliament and the Council of the EU was reached in June 2022. This was followed by the publication of the final compromise text. After adoption by the European Parliament and the Council of the EU, the final Directive (EU 2022/2464) was published in the EU Official Journal on 16 December 2022. The Directive is available in all EU Member States’ languages. The final legal text confirms the outcome of the provisional political agreement as laid down in the compromise text.
What is the impact?
The aim of the CSRD is to bring sustainability reporting on a par with financial reporting. This has required a number of measures, including the extension of scope and more detailed and standardised reporting requirements on environmental, social and governance matters mandatory sustainability reporting standards known as European Sustainability Reporting Standards (ESRS) are the codification of the specific reporting requirements. The CSRD also looks to ensure that reported information will be easy to access and use. Therefore, the related disclosures will be included in the (consolidated) management report, in a dedicated section, digitised in a machine- readable format. To enhance the reliability of reported information, the CSRD has introduced an independent third-party assurance obligation for reported sustainability information (including ESRS compliance), initially with limited assurance. In addition, the CSRD includes an extension of the current enforcement system to include sustainability reporting as well as an extension of a public-interest entity's (PIE’s) audit committee tasks to cover not only financial reporting but also its responsibility for sustainability reporting.
It is worth noting that, as a consequence of the CSRD extended scope for sustainability reporting, more companies will be obliged to disclose information in accordance with Article 8 of the EU Taxonomy Regulation. The EU Taxonomy is a classification system which establishes a list of environmentally sustainable economic activities. Entities will need to report how, and to what extent, their activities are associated with economic activities that qualify as environmentally sustainable under the EU Taxonomy system.
To whom and when does it apply?
The CSRD significantly expands the scope of entities affected by the new sustainability reporting regime. It is estimated that about 50,000 companies operating in the EU are affected by the new regulations. In summary, the CSRD targets three types of entities (referred to as ‘“undertakings’” in EU legislation) and groups, with a staggered approach for first-time application:
It should be noted that:
  • there are certain exemptions available if a company is included in the consolidated sustainability reporting of its parent company;
  • double reporting might be possible in some cases, (that is, sustainability reporting could be required at the global group level of an entity headquartered outside the EU and at the level of an EU subsidiary or EU branch); and
  • the actual analysis is complex, and companies should review the rules carefully and assess the need for early involvement of legal experts. 
What are the next steps?
After the CSRD comes into force in early January 2023, Member States have 18 months to transpose the provisions into national law. During the transposition process, each EU Member State has the option of enacting national provisions that are more stringent than those specified in the Directive and/or to decide on the provisions that are left to the discretion of EU Member States.
Where do I get more details?
You can find more information on the new EU sustainability reporting regime:
For more information, contact Peter Flick (peter.flick@pwc.com), Olivier Scherer (olivier.scherer@pwc.com), Andreas Ohl (andreas.ohl@pwc.com) or Henry Daubeney (henry.daubeney@pwc.com).
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