How companies should prepare for the new EU Corporate Sustainability Reporting Directive (CSRD)
The quantity and quality of sustainability information will improve significantly in the next few years when approximately 50,000 European companies will have to meet extensive sustainability reporting requirements due to the introduction of the mandatory Corporate Sustainability Reporting Directive (CSRD). This is the most significant change in financial reporting since the introduction of International Financial Reporting Standards (IFRS). It is not just a technical update in reporting standards but an organisational change and strategic boost to green transition. Next, I will explain why so.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
As part of the Sustainable Finance Action Plan, the European Commission will gradually make sustainability reporting (CSRD) and its independent assurance mandatory for listed companies AND other large companies during 2024–2026. A company is classified as significant if it meets at least two of the three size criteria:
- It has more than 250 employees.
- Its turnover is more than 40 million euros.
- The balance sheet is more than 20 million euros.
In the Nordic countries, we have many capital-intensive unlisted companies that employ less than 250 people, but they have heavy assets. Therefore, for example, many companies in the construction industry, real estate, and logistics now have to start reporting on their sustainability for the first time. According to the latest estimates, the reporting reform concerns approximately 1,200 companies in Finland. Only about 10% of them are listed companies. Most of them have never reported on their sustainability performance. Sadly, many of them are unaware of what's coming.
About the author
Hanna Silvola is an Associate Professor of Accounting at Hanken School of Economics. Her research interests include ESG measurement, reporting and assurance, sustainable finance, and sustainable investing. She has international experience from, among others, the London School of Economics and Stanford University (USA). She also serves as an expert member of the European Securities Market Authority's (ESMA) sustainable finance advisory working group.
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