What is CSRD?

Definition

CSRD is an abbreviation for the Corporate Sustainability Reporting Directive and is the directive from the EU that aims to create optimal conditions for the EU and its member states to reach their goal of being Net Zero by 2050.

In today's business world, sustainability is no longer a trend; it is an integral part of corporate strategy and decision-making. In this world, the Corporate Sustainability Reporting Directive (CSRD) is becoming increasingly critical for companies that want to build a strong foundation for their responsibility. But what exactly is CSRD, and how is it included in the current EU directives that set out the path for sustainable business?

Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (CSRD) is an EU directive that aims to create the best possible conditions for the EU and its member states to achieve their goal of becoming Net Zero by 2050. In addition to working for a more sustainable world, the directive has three other important purposes.

Adaptation to EU directives

With the latest EU directives, especially within the framework of the Corporate Sustainability Reporting Directive (CSRD), companies are now required to include and report sustainability information in their annual reports.

Standardization for comparability

CSRD within the EU directives aims to standardize reporting practices to facilitate comparisons between companies and give stakeholders a clearer picture of companies' sustainability performance.

Increased transparency and social responsibility

CSRD integrates the principles of increased transparency and social responsibility, which becomes particularly important in light of the EU's ambitions to create a sustainable economy.

Who is covered by CSRD?

Sweden already has laws that are stricter than the rest of the EU regarding who is covered by this type of reporting. This means that the new legislation from the EU does not significantly change who is covered, but those who are covered are subject to additional requirements.

Until 2026, all "large" companies are covered. What is defined as a "large" company is a company that meets two of the following criteria:

Over 250 employees
Over 40 million euros in net sales
Over 20 million euros in total assets

In addition, by 2027 all publicly listed companies will be covered by the CSRD.

Positive effects of CSRD

Within the framework of sustainability reporting, ESG (Environmental Concern, Social Responsibility, and Corporate Governance) is a central component that not only reflects companies' sustainability efforts but also their strategic adaptation to regulations such as CSRD and EU directives. These directives set a clear tone for corporate responsibility and open up opportunities for positive effects on several levels.

Increased compliance

Companies that adapt to CSRD and EU directives position themselves to better meet sustainability requirements and minimize the risk of fines and sanctions.

Enhanced attractiveness

According to EU directives, companies that actively report on their sustainability efforts can attract more investment and talent, which strengthens their competitiveness.

Global lead

EU directives and CSRD position European companies as global leaders in sustainability reporting, which benefits their brand position internationally.

CSRD and EU directives thus become not only guidelines for compliance but a powerful driving force for shaping the companies of the future. By embracing these initiatives, companies can not only adapt to the prevailing sustainability wave but also be forerunners and pioneers in creating a sustainable economy.