CSRD/ESRS: Mandatory Sustainability Reporting with Legal Consequences

The Corporate Sustainability Reporting Directive (CSRD) is EU Directive 2022/2464, which replaces the Non-Financial Reporting Directive (NFRD) and requires in-scope companies to publish a sustainability report that is part of their management report, prepared in accordance with the European Sustainability Reporting Standards (ESRS), and subject to limited external assurance. In Spain, large companies meeting two of three thresholds — more than 250 employees, annual turnover above EUR 50 million, or total assets above EUR 25 million — must report under CSRD from fiscal year 2025 onwards. The ESRS framework covers 12 thematic standards across environmental (E1–E5), social (S1–S4), and governance (G1) topics, and requires a double materiality assessment — evaluating both the company's impacts on people and the environment, and the financial effects of sustainability risks on the company — as the mandatory starting point for determining which disclosures apply.

The CSRD represents the most profound change in corporate reporting since the generalisation of audited financial accounting. Sustainability information is now held to the same standard of rigour, standardisation, and external verification as financial information. Companies that approach this as an enhanced ESG report will find requirements that go far beyond anything previous voluntary practice demanded.

Why CSRD Compliance Requires Much More Than an Enhanced ESG Report

Most companies approaching CSRD for the first time dramatically underestimate what is required. The 12 thematic ESRS standards — covering climate, biodiversity, pollution, water, employees, supply chain, communities, and governance — create a matrix of potential disclosure requirements. The double materiality assessment is the obligatory filter: only topics that are material from an impact or financial perspective trigger those requirements. But conducting that assessment correctly — with structured stakeholder engagement, documented evidence, and an outcome that auditors can verify — is itself a multi-month process. Without it, the entire report lacks its foundation. The limited assurance requirement further raises the bar: every reported data point must be supported by documented evidence and auditable internal controls. Preparing that documentation retroactively, after the assurance process starts, is costly and generates observations that damage the quality of the first report. Our CSRD advisory engages companies before those deadlines become urgent.

Our CSRD Double Materiality and ESRS Reporting Process

We guide companies through the full CSRD compliance cycle. The double materiality assessment identifies which sustainability topics are material from two complementary angles: what impacts the company has on people and the environment (impact materiality), and what external sustainability factors generate financial risks or opportunities (financial materiality). On that foundation, we design the ESRS-aligned reporting framework — report structure, key indicators, required policies and targets, value chain data collection processes. We establish data collection systems, coordinate with external auditors for limited assurance, and manage the full publication process in the required management report format. For companies already in progress with an internal CSRD process, we conduct a gap analysis against ESRS requirements and complete the process to audit-ready standard. The ESG strategy underpinning the report must be coherent and withstand scrutiny: we ensure both compliance and strategic credibility.

Real Results in CSRD Compliance: First Reports Published on Time with Limited Assurance

• 50+ companies guided through their first CSRD/ESRS materiality assessment and report.
• Double materiality assessment conducted with structured stakeholder engagement and documented evidence supporting the outcome.
• Data collection systems implemented and tested before the reporting year ends, not after.
• Limited assurance coordination with external auditors: all supporting documentation prepared proactively to eliminate material observations.
• EU Taxonomy alignment indicators calculated and integrated with financial data for consistency.

The CSRD also transforms the information available to capital markets and financial institutions. Institutional investors and banks applying ESG criteria will use this standardised information to compare companies with a precision that voluntary reports never permitted. For companies contemplating an IPO or the entry of a financial investor, the quality of the first CSRD report is a reputational and financial asset. The relationship between CSRD reporting and corporate governance is direct: effective sustainability reporting requires the same governance discipline — clear accountabilities, documented processes, auditable controls — that good governance demands for financial reporting. Companies that invest in building a robust reporting system now, rather than rushing to meet the minimum at deadline, will be better positioned for the next wave of mandatory requirements that European regulation will bring.