When it comes to sustainability reporting, numerous acronyms can make it difficult to keep track. In this video, we'll explain the latest addition to this alphabet soup: the CSRD and its significance for climate risk reporting.
As part of the European Green Deal, the EU has introduced regulations, with the key piece being the Corporate Sustainability Reporting Directive (CSRD). Implemented this year, it requires companies to disclose the sustainability impact of their business.
The CSRD builds upon the existing Non-Financial Reporting Directive (NFRD) and significantly expands the scope, from around 12,000 to nearly 50,000 companies, who will have to comply with mandatory reporting in the coming years.
Brace for more acronyms: The reporting standards that companies have to use for CSRD reporting are defined in the European Sustainability Reporting Standards (ESRS) by EFRAG. These are currently undergoing their final public reviews and will be finalized later this year. Companies will be required to report on transition and physical climate risks, including the economic impacts of climate hazards.
The new rules will first apply to companies in the 2024 financial year, with reports due in 2025. Later in the decade, small and medium-sized companies and even large companies outside the EU will have reporting obligations.
If you need assistance with physical climate risk reporting in the EU, don't hesitate to reach out to us. We're here to help!