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The CSRD expands the existing Non-Financial Reporting Directive (NFRD) and introduces stricter reporting requirements. It affects not only large, publicly traded companies but also small and medium-sized enterprises (SMEs). From the 2025 reporting year, large non-publicly traded companies must meet certain criteria: a balance sheet total of at least 25 million euros, net sales of at least 50 million euros, or at least 250 employees. From 2026, the reporting obligation also applies to SMEs with a balance sheet total of 450,000 euros, net sales of 900,000 euros, or more than 10 employees.
A central element of the CSRD is the principle of double materiality. Companies must report both the significant impacts of their activities on the environment and society ("impact materiality") and the financial risks and opportunities ("financial materiality"). This means that both financial and non-financial information must be considered to provide a complete picture of the company's performance.
Reporting under the CSRD is carried out according to the European Sustainability Reporting Standards (ESRS), developed by the European Financial Reporting Advisory Group (EFRAG). These standards cover 826 mandatory data points and 257 optional disclosures, detailing various aspects of sustainability. Three drafts of guidelines are available to support companies in meeting the materiality assessment and reporting requirements.
The CSRD requires reports to be submitted in the iXBRL (Inline eXtensible Business Reporting Language) format. This format combines human-readable HTML with machine-readable tags that assign meaning to the numbers and statements. This is intended to improve the comparability and consistency of data and facilitate analysis.
Sustainability reporting will become part of the management report and thus subject to external audit. Currently, a limited assurance audit is required, while from 2028, a reasonable assurance audit will be mandatory. These audits ensure that the disclosures comply with the CSRD and ESRS and that the process for determining the reported information was properly conducted.
The CSRD offers companies the opportunity to enhance their sustainability performance and position themselves for the future. Careful planning and early preparation are crucial to meet the requirements and reap the benefits of the new reporting obligations. By implementing the CSRD, companies can increase transparency and comparability, contributing to the achievement of the Paris Climate Goals.
Relatico’s SRM software supports companies in efficiently managing their supplier relationships and turning regulatory requirements into strategic advantages. With Relatico, you can optimize your procurement processes and create a proactive, cooperative procurement environment. Contact us to learn more and effectively meet your CSRD requirements.
Bernd possesses extensive experience in strategic procurement, shaped by his tenure at Eckes-Granini, Symrise and DuPont de Nemours. Currently, he is focused on sustainable sourcing and supply chains, collaborating with the relatico team to develop practical software solutions. Additionally, Bernd runs his own agricultural business and is involved in supply chain projects globally.
