Fit for CSRD: Is Your Company Ready?

The first set of companies has begun to implement the European Union’s Corporate Sustainability Reporting Directive (CSRD). By 2029, 50,000 organisations in the union or with subsidiaries within the EU will have to comply with its reporting standards. 

This summary of our Fit for CSRD report highlights the timeline for implementation, depending on the type of business, as well as details of the estimated application costs of complying with CSRD and the progressive reporting scope of the directive.

CSRD timeline 

Estimated CSRD costs

The European Financial Reporting Advisory Group (EFRAG) estimates that those companies that were previously within the scope of the NFRD, which CSRD has superseded, will face the largest costs in implementing CSRD, both one-off and recurring. 

The estimates are:

• For in-scope NFRD organisations – those large listed companies with more than 500 employees – the average will be €287,000 as a one-off payment and around €320,000 annually.
• Non-NFRD, non-listed entities with fewer than 500 employees can expect to pay an average of €36,000 one-off and €40,000 recurring every year. 

Reporting scope of CSRD

Companies that come into the scope of CSRD will have to carry out the following workflows: 

• Double materiality analysis that assesses not only the company’s impact on its ecosystem, but also the ecosystem’s impact on the company.
• Disclosure requirements for both qualitative and quantitative data on 1,114 points, relating to the environment, social factors, governance standards and other general requirements.
• Calculating the alignment with six objectives within the EU Taxonomy. 
• Preparing a list of Principal Adverse Impacts (PAI) that most affect their organisation as per the Sustainable Finance Disclosure Regulation (SFDR).
• Analysis of environmental and social risks within the company’s value chain in accordance with the forthcoming Corporate Sustainability Due Diligence Directive (CSDDD). 

Some of the environmental standards will be phased in over the next few years, with qualitative data only being reported for European Sustainability Reporting Standards (ESRS) E1, E2 and E3 from the financial year 2025. In terms of reporting on carbon footprint, the priority for FY 2024 will be on Scope 3 data (those emissions that are indirectly caused by activity up and downstream from the business). Later, organisations will start reporting on more in-depth information. 

There will also be sector-specific reporting standards for certain high-risk industries that will be implemented in the future.