Becoming CSRD-Ready

Update on EU Corporate Sustainability Reporting Directive CSRD in Ireland.

The EU Corporate Sustainability Reporting Directive (CSRD) requires companies in scope of the directive to compile and report on significant amounts of sustainability data in their annual reports. These data must be uncovered and reported in accordance with the European Sustainability Reporting Standards (ESRS), which mandate a double-materiality assessment to determine information that is material to the business and that is to be included in the sustainability statement. Reporting will require external assurance by a certified provider.

The CSRD must be transposed into member state law by 6 July 2024. France was the first country to do so in 2023, and legislation is expected to be published in Ireland in the coming weeks.

Becoming “CSRD-Ready”

Becoming “CSRD-Ready” is a significant undertaking, requiring value chain and sustainability expertise to better understand activities in operational control as well as upstream and downstream activites. The project will involve stakeholders across the value chain, requiring leadership to steer the process, and input from legal, finance, audit and risk as well as guidance from external advisors. A useful starting analogy is the undertaking in organisations to be “GDPR-Ready”. However, value chains and the range of potential sustainability impacts, risks and opportunities are significantly more complex to map and understand, and the context of the environmental crisis infinitely more urgent. Under CSRD/ESRS, entities must make a “reasonable effort” to implement processes to collect data, initially using as much primary data as possible in the first instance, with estimates and explanations for any gaps. In later iterations, entities are expected to narrow the performance gap in data reliability.

Immediate steps for companies

Companies are advised to undertake an immediate internal review to determine if they are in scope for CSRD and to understand the requirements for the upcoming years.

These are the reporting requirements in stages:

  1. Financial years commencing on or after 1 January 2024 reporting in 2025: Large public interest entities (companies with EU-listed securities and EU-regulated credit institutions and insurance undertakings) or public interest entities that are parent undertakings of a large group, with more than five hundred employees (including on a consolidated group basis).
  2. Financial years commencing on or after 1 January 2025. reporting in 2026: All other large undertakings or parent undertakings of a large group (whether listed or not).
  3. Financial years commencing on or after 1 January 2026, reporting in 2027 (with some time-limited opt-outs): SME public interest entities (but not micro undertakings), including some captive insurance and reinsurance undertakings.
  4. Financial years commencing on or after 1 January 2028 reporting in 2029: Subsidiaries of non-EU parent companies, where the non-EU parent company generates at least €150m turnover in the EU on a consolidated basis. Branches of non-EU companies that generate a turnover of €40m and the non-EU company generates on a consolidated basis at least €150m turnover in the EU. The report must include sustainability information on the non-EU parent company and its worldwide group.

Key points for all companies

It is important for all companies, big and small, to note the following:

  • The EU is positioning itself as the global leader in sustainability.
  • These standards provide guidance to businesses that want to be compliant; understand the impacts, risks, and opportunities of their business model and reposition strategically for the EU green economy.
  • The trajectory is starting with bigger entities and moving to smaller entities. It is expected that businesses not in scope in year 1 for example will receive information requests from businesses in scope as part of due diligence and vendor qualification.
  • The Department of Enterprise Trade Employment is working towards the 6 July deadline for CSRD.

For more information, read our technical guidance Preparing for the CSRD 2024:

Preparing for the Corporate Sustainability Reporting Directive (CSRD) - Forvis Mazars Group

To learn more, contact Johnny Meehan, Head of Sustainability Consulting.


Preparing for the CSRD guide