The Corporate Sustainability Reporting Directive (CSRD) aims to improve transparency and accountability when large and listed companies are required to disclose detailed information about their environmental footprint and impact on nature.
It helps investors, customers, employees and stakeholders to assess the company’s performance – and potential risks – in response to their environmental, social and governance (ESG) commitments.
Being transparent in their reporting is crucial for illustrating what a company truly does for the environment and wider society. Being open about their activities helps to build trust, drives a more responsible and sustainable business approach and, importantly, prevents false or misleading claims, known as ‘greenwashing’, being made.
Introduced by the European Union from January 2024, for EU businesses and larger companies selling into the EU, the UK has its own sustainability reporting regulations that firms should abide by.
Our experts at CSX have a deep understanding of this regulation landscape and are adept at ensuring that companies’ sustainability reports are detailed, accurate and reliable. Here, our expert Megan Russell, CSX’s quality assurance and compliance lead, explains the process…
What is CSRD reporting?
The directive for detailed, audited CSRD reporting is meant to ensure that a company’s sustainability impact – and the risks and opportunities it faces – have been carefully reported and fully disclosed.
The reports must adhere to the European Sustainability Reporting Standards (ESRS), which aim to improve transparency and accountability, ensuring firms are being open about their policies and their effect.
When is CSRD reporting required?
Known as ‘double materiality’, companies must explain how sustainability issues affect their business financially as well as their impact on the environment and society – and how these factors correlate with each other.
However, there are some delays in the reporting as the European Commission looks to simplify the data points required. It unveiled an ‘omnibus package’ in February 2025 aimed at reducing the administrative burden – but there is still some uncertainty in the business community about the possible outcomes.
For example, listed small and medium-sized enterprises (SMEs) will be required to report their 2026 data under the CSRD in 2027 – although they can opt out until 2028 if they need more time to prepare. Non-listed SMEs are not required to report but may need to provide information as part of a supply chain with larger partners.
This may seem to go against what the CSRD is trying to achieve – we need more transparency, reporting and visibility of that nature impact data. We need it to feed all the way through the value chain to drive accountability across a business and go beyond the immediate scope of emissions into the second and third scope.
Whose responsibility is it to report on CSRD?
Large companies:
CSRD reporting applies to large companies based in, or supplying into, the EU meeting two of these criteria – more than 250 employees, more than €40m turnover in the EU or more than €20m total assets.
Larger companies subject to the regulations must report on their entire value chain, including smaller suppliers – so this could impact SMEs. The large company’s management and board of directors are ultimately responsible for ensuring accurate reporting.
Farmers in the supply chain:
While most individual farmers won’t report under the CSRD directly, their role as part of a large company’s supply chain, such as a supermarket or food processor, is becoming increasingly important.
Larger businesses will need sustainability information from farmers, such as their working practices and data on biodiversity and carbon assessment to feed into their reports.
Why is it important for companies to report on CSRD?
As well as their legal requirements, it’s important for the business community to tackle the issue of ‘greenwashing’. Companies can’t just say that they are nature-friendly – they must provide the evidence. They must also consider the wider net zero targets required in the UK by 2050. It needs a collaborative effort to work towards those emission targets.
Reporting feeds into consumerism and the public’s changing attitudes towards choosing more nature-friendly businesses. Consumers are becoming more savvy and environmentally conscious about the products they select – that gives a company an edge, backed up by its annual report which includes its sustainability statement.
What are the updates to the CSRD requirements?
The proposed ‘omnibus’ changes to CSRD reporting, announced in February 2025, aimed to reduce the administrative burden on companies by adjusting the timelines and scope of the reporting requirements.
The focus is on the largest companies that are most likely to have the biggest impact on people and the environment. The proposals seek to reduce the reporting burden on SMEs – and a limit on the information that larger firms can demand from smaller suppliers.
What happens if you don’t report on CSRD?
Companies can face financial and legal consequences by not reporting on CSRD. Each EU member state sets its own enforcement measures, but penalties may include significant financial fines for non-compliance or false reporting after sustainability reports have been independently verified.
Importantly, non-compliance can lead to loss of confidence by investors and banks, which increasingly require CSRD-compliant data for their decision-making. It can also damage a company’s reputation in the eyes of its customers and suppliers.
How can CSX help with CSRD reporting?
Many organisations are already familiar with reporting their ESG impacts – CSRD reporting simply takes that to the next level.
With finance and sustainability reporting now firmly linked, we understand that the process can be a daunting one for businesses and their supply chains. We can help people address where their risks are.
We work closely within supply chains from the very beginning, helping to set up farmers and food producers with the level of data they need that can trickle down the supply chain through their products and purchasers.
At CSX, we can support them through the process, helping to report the data and providing a detailed overview of the value of their land or produce.
We work with landowners to produce a full biodiversity assessment of their land, such as the vegetation, bird acoustics and carbon levels, highlighting key areas of value. Our drone surveying creates a digital twin that pulls in these important data points to create a paper trail of progress across the land.
We also support the biodiversity net gain (BNG) process where developers need to improve nature levels by 10% after construction through funding projects with a landowner or farmer. They can factor that into their sustainability report.
Get help and advice on reporting CSRD
The data and methodologies required for CSRD reporting must be validated to build accountability and transparency, making early preparation essential.
At CSX, our tailored CSRD services help businesses to meet CSRD compliance and reporting requirements. Contact us by either calling 01609 786655, emailing us at contact@csxcarbon.com, or visiting our contact page, and our experts will be happy to help.