CSRD / ESRS

The CSRD directive (Corporate Sustainability Reporting Directive) requires concerned companies to publish an annual sustainability report covering their environmental, social and governance (ESG) impacts. It replaces the NFRD directive (Non-Financial Reporting Directive) by considerably broadening the scope and depth of required information.

ESRS (European Sustainability Reporting Standards) are the technical standards detailing what must be reported. 12 thematic ESRS are published: 2 cross-cutting (ESRS 1 and 2), 5 environmental (E1 climate, E2 pollution, E3 water, E4 biodiversity, E5 circular economy), 4 social (S1 own workforce, S2 value chain, S3 communities, S4 consumers), 1 governance (G1).

Central concept: double materiality. The company must report both the impact it has on the environment and society (impact materiality) AND the impact these issues have on its own financial situation (financial materiality).

• Wave 1 (first year 2024): companies already subject to NFRD, large listed or public-interest companies above 500 employees.
• Wave 2 (first year 2025): other large companies and mid-caps exceeding two of three thresholds, 250 employees, €50m revenue, €25m balance sheet.
• Wave 3 (first year 2026): listed SMEs (with simplified ESRS-LSME standard).
• Wave 4 (first year 2028): third-country companies generating > €150m revenue in the EU.

• 1 January 2024: first CSRD reporting year for NFRD companies.
• 1 January 2025: first CSRD reporting year for other large companies and mid-caps.
• Throughout 2026: publication of first wave-2 reports + progressive adoption of sectoral ESRS (transport, energy, agro, finance).
• 2028 horizon: sectoral ESRS finalized and applied to third-country companies.

Sanctions are set by each member state. In France, breach of the publication or audit obligation can lead to criminal sanctions (up to 18 months imprisonment and €75,000 fine for executives), civil sanctions (liability), and market sanctions (AMF alerts for listed companies).

Beyond direct sanctions, commercial risk is significant: large buyers, banks and ESG investors now require the CSRD report (or equivalent indicators) as a prerequisite for commercial relationships. A non-reporting company progressively drops off tenders.

• Materiality mapping: identify material ESG issues via double materiality, document the process, and have it audited.
• Industrialized ESG data collection: Scope 1/2/3 emissions, social indicators per site, documented governance. The 8-person-day manual approach doesn't hold, you need an automated data chain.
• Report generation in the XBRL Inline Tagging format required by the directive (XHTML + ESRS tags), with source audit trail.
• For high-constraint sectors (transport, industry, banking): integration of sectoral indicators as EFRAG publishes them.