CSRD 2.0: Getting More Sustainable Step by Step

09 June 2022


min read

There is no question that sustainability is one of the key issues of the next decades for both companies and the economy as a whole.

There is no question that sustainability is one of the key issues of the next decades for both companies and the economy as a whole. In addition to the obvious need for action from an ecological perspective, it is also increasingly a matter of long-term profit potential. A McKinsey survey in 2021 for the DACH region (comprising the German, Austrian and Suisse markets), for example, found that more than three quarters of consumers (78%) consider sustainability as a factor when making purchasing decisions.

To further advance sustainability, legislation at both European and national level focuses on appropriate reporting by means of the CSR Directive, which is intended to make it easier to manage, track and assess sustainability measures.

However, directives and laws are complex and subject to constant development. This article therefore deals with:

  • which legal guidelines currently apply to sustainability reporting
  • what fundamentally changed for companies in April 2021
  • what further changes can be expected
  • how companies can successfully master the challenge of sustainability reporting.

Because a proactive approach is what counts now. Rolling up one's sleeves when it comes to sustainability is what makes change possible in the first place and shows stakeholders your willingness to assume economic, environmental and social responsibility.

What Exactly Is the CSR Directive and Why Is It So Important?

Sustainability reporting has been a household word for large companies since at least 2017. At that time, the EU "Corporate Sustainability Reporting Directive (CSRD)" was implemented in German law as the "CSR Directive Implementation Act (CSR-RUG)" and in Austrian law as the "Sustainability and Diversity Improvement Act (NaDiVeG)". Originally introduced as the "Non-Financial Reporting Directive (NFRD)", the new name of the directive using the term "Corporate Sustainability" emphasises the focus on sustainability as a business objective.

The CSR Directive defines the scope and content of companies' reporting obligations with regard to sustainability. Originally, these applied to publicly traded companies as well as financial service providers and insurance companies with more than 500 employees and more than €40 million in sales, or total assets of more than €20 million. In 2018, a study in Germany identified 487 companies that are required to report according to these regulations under the CSR RUG—a number that is expected to increase sharply with the next iteration of the CSR Directive.


CSR Directive Iterations Compared: 2017 vs. 2021 

Based on feedback from companies and stakeholders, the EU then drafted a revised CSR Directive in April 2021. The changes are focused on one thing in particular: sustainability is taking on an increasingly important role, and so the corresponding reporting should ultimately be on a par with financial reporting.

This becomes apparent, for example, in the form of reporting. Previously, in addition to the management report, sustainability could also be reported in the Federal Gazette (Bundesanzeiger) or on the company's website. Under the revised directive, however, publication as part of the management report is mandatory. Among other things, this shortens the time available for publishing after the end of the reporting period.

In line with the stricter requirements, the audit of the report is also changing. Previously, this was voluntary, but it will become mandatory with the implementation of the evolved CSR Directive. Initially, the less strict requirements of limited assurance will apply. From 2026, however, the requirements of reasonable assurance will apply, which are also used for financial reporting.

Another striking difference is the expansion of the scope of the reporting obligation. With the revised CSR Directive, all companies that fulfil at least two of these three characteristics are now addressed:

  • the company has total assets of €20 million or more,
  • the company has net sales of €40 million or more,
  • the company has 250 employees or more.

The obligation also applies to all listed companies. The only exceptions are microenterprises that do not exceed a balance sheet total of €350,000 and net sales of €700,000, and do not have more than 10 employees on average per year—two of these three criteria must be met to qualify as a microenterprise.

EY assumes that with this extended scope, around four times as many companies will be subject to the reporting obligation across Europe. For Germany in particular, PWC even forecasts that the number of companies subject to the CSR Directive will increase tenfold.

Criteria As of 2017 As of 2021

Affected businesses

  • publicly traded companies
  • financial service providers and insurance companies
  • large corporations
  • listed companies (except for microenterprises)

Reporting obligation

  • balance sheet total ≥ €20 million
  • net sales ≥ €40 million
  • ≥ 500 employees on average during the year
  • balance sheet total ≥
    €20 million
  • net sales ≥ €40 million
  • ≥ 250 employees on average during the year
Time scale one year Short-, medium- and long-term

Implementation and interpretation

national law

Europe-wide standards

Audit optional mandatory, external
Form of reporting management report or Federal Gazette (Bundesanzeiger) or company website management report

In addition, stricter requirements are placed on the content of sustainability reports. Whereas the report previously only had to cover one year, now short-, medium- and long-term forecasts and analyses are expected. Europe-wide standards for this are currently still being developed, but they will cover the three main areas of governance, environment and society. There are six environmental targets that have been adopted, the first two of which already had to be taken into account in the 2021 reporting year:

  • Climate protection
  • Adapting to climate change
  • Sustainable use and protection of water and marine resources
  • Transition to a circular economy
  • Pollution prevention and control
  • Protection and restoration of biodiversity and ecosystems

The focus will be even more on quantifiable data. In the EY webinar "New Corporate Sustainability Reporting Directive (CSRD) – Sustainability-related disclosure requirements in the management report 2023", Yvonne Meyer, Associate Partner Climate Change and Sustainability at EY Carbon, emphasised: "Purely qualitative information is no longer sufficient. With the upcoming standardisation, we expect above all, very clear requirements for quantitative KPIs that will then have to be gathered and reported."

Establishing processes to ensure a reliable data situation is therefore essential—especially because companies no longer have much time to adapt to the higher requirements of the revised CSR Directive.

When Do the Changes Apply and What Do They Mean for My Company?

The first report under the revised CSR Directive will be due in 2024. However, it will be based on the data from the previous year. Therefore, the relevant processes for data collection must be in place by the beginning of 2023 at the latest to provide a sufficient foundation for sustainability reporting.

A study on the implementation of the first iteration of the CSR Directive quotes an SDAX company on this issue as follows: "For the first report, we relied on topics and data that are recorded at our company. Because that was the big problem: there’s quite a lot that is simply not covered." The revised guideline's greater focus on quantitative measurements exacerbates this situation in many areas.

  • Juni 2022: Die CSRD 2.0 wird finalisiert
  • November 2022: Entwurf der EU-Berichtsstandards (EFRAG) wird präsentiert
  • Januar 2023: Die erste Berichtsperiode unter der neuen CSR-Richtlinie beginnt
  • November 2023: Branchenspezifische Ergänzungen der EU-Berichtsstandards werden erwartet
  • Januar 2024: Die ersten Nachhaltigkeitsberichte unter der neuen CSR-Richtlinie müssen als Teil des Lageberichts veröffentlicht werden
  • Januar 2026: Das Anforderungsniveau der externen Prüfung wird von eingeschränkter Prüfungssicherheit auf hinreichende Prüfungssicherheit angehoben


If your company has already been subject to the reporting obligation in the past, it is therefore now necessary to critically review existing reporting measures and align them with the stricter information requirements. If you are affected by the CSR Directive for the first time, the challenge is to establish the necessary internal processes early on to ensure thorough and data-based reporting.

But even SMEs, which have not yet been included in the target group of the CSR Directive, will be measured by stakeholders against the new standards. In any case, transparency in sustainability matters will only become more relevant. The time to act is now.

3 Steps Your Company Should Implement Now


1. Prepare for increased reporting requirements in advance

With fiscal 2023 as the first reportable year, now is the time to plan and set up processes for data collection. Nicole Richter, head of EY Germany's Climate Change and Sustainability Services, pointed out in the above webinar that companies should expect a learning curve: "I would recommend starting early—preferably the day before yesterday. The topic is really very complex."

2. Create a solid data basis

Yvonne Meyer also confirms how important data quality will be. "The big issue in many companies will probably be the verifying of data,” she says. “The difficulty will then be to go back down the data path, because especially companies that are just building their reporting systems are probably not yet robust enough in this regard." To design systems that enable such data tracking, external support can be extremely helpful.

3. Get support from external experts

Partners like Resourcify focus on making sustainability measurable and controllable. With Resourcify's easy-to-use software and platform, waste and recycling streams can be seamlessly tracked, managed and optimised. Working with external companies to manage and control the complete sustainability reporting offers long-term benefits: using automatically generated data and effortlessly trackable KPIs, a wide range of environmental targets can be set, achieved and documented.


CSRD: A Look Into the Future

The current draft of April 2021 is certainly not the final iteration of the legal framework for promoting sustainability. The topic of reporting is therefore not only a challenge, but above all an opportunity. More transparency also means more options. After all, in a survey of companies on the first edition of the CSR Directive, three-quarters of the respondents stated that the new legal framework had had a positive impact on their understanding of sustainability.

Whether it's Zero Waste or another sustainability target—the same tools and data that enable reliable reporting also create the foundation of achieving strategic business goals.

Resourcify Sustainability Index Report 2022

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