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Corporate Sustainability Reporting Directive - April 2021

David Baur Director and Leader Accounting Consulting Services, PwC Switzerland May 04, 2021

The European Commission published the proposal for a Corporate Sustainability Reporting Directive (CSRD) on 21 April 2021.

What is the issue?

The revision of the European Non Financial Reporting Directive (NFRD) was eagerly awaited. The European Commission published the proposal for a Corporate Sustainability Reporting Directive (CSRD) on 21 April 2021.

The objective is to improve and harmonise the disclosure of sustainability information by companies, which will provide financial companies, investors and broader public with comparable and reliable sustainability information. It aims to create a set of rules that will – over time – bring sustainability reporting on a par with financial reporting.

What is the impact and for whom?

More detailed reporting requirements that are standardised under a set of new European sustainability reporting standards, thereby avoiding the application of a wide variety of standards and frameworks. The draft standards would be developed by EFRAG (European Financial Reporting Advisory Group). The standards will be tailored to EU policies, while building on international standardisation initiatives.

Mandatory reporting for all listed companies on EU-regulated markets (except for listed micro-enterprises, but including non-EU issuers) and for all large companies/groups (covered by two of the following three criteria: a) balance sheet total > 20 million euros, b) net turnover > 40 million euros, c) average number of employees > 250). Nearly 50,000 companies in the EU are expected to be affected, compared to 11,000 under the current Directive.

The extended scope will also include EU subsidiaries/subgroups of third country parent companies (above relevant size criteria). The CSRD foresees the possibility to exempt these companies from the new reporting requirements if they are included in the consolidated management report of their parent company, provided this report includes the required sustainability information (either in accordance with the CSRD or in a manner equivalent to EU sustainability reporting standards).

Reporting to be verified by an independent auditor with “limited assurance”.

All information will be published as part of companies’ management reports, and disclosed in a digital, machine-readable format (as ESEF) to feed the European single access point.

Companies within the scope of the CSRD must also comply with the reporting obligations according to Art. 8 of the Taxonomy Regulation, i.e. the disclosure of ecologically sustainable (“green”) sales revenues, investment and operating expenses.

When does it apply?

First application: financial years starting on or after 1 January 2023.


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Contact us

David Baur

David Baur

Director and Leader Accounting Consulting Services, PwC Switzerland

Tel: +41 58 792 26 54