CSRD (Corporate Sustainability Reporting Directive)

What is the CSRD

The Corporate Sustainability Reporting Directive (CSRD), Directive 2022/2464, is the EU’s cornerstone legislation for corporate sustainability disclosure. It requires companies to report on environmental, social, and governance (ESG) matters using the mandatory European Sustainability Reporting Standards (ESRS), developed by EFRAG. Reports must be digitally tagged (XBRL) and subject to limited assurance by an auditor.

Who must comply

The CSRD applies in phases:

• 2024 (reporting on FY 2024): Companies already subject to the NFRD (large public-interest entities with >500 employees)
• 2025 (reporting on FY 2025): Large companies meeting two of three criteria: >250 employees, >€40M revenue, >€20M total assets
• 2026 (reporting on FY 2026): Listed SMEs (with opt-out until 2028)
• Non-EU companies with >€150M EU revenue must report from 2028

Double materiality

A key innovation of the CSRD is the double materiality assessment. Companies must report on both:

• Financial materiality: how sustainability matters affect the company’s financial performance
• Impact materiality: how the company’s activities affect people and the environment

This dual lens ensures that sustainability reporting captures risks and impacts in both directions.

ESRS standards

The ESRS framework includes cross-cutting standards (ESRS 1 and 2) and topical standards covering climate change, pollution, water, biodiversity, workforce, communities, consumers, and business conduct. Companies report only on topics deemed material through their double materiality assessment.

Implications for companies in Spain

Spain must transpose the CSRD into national law. For companies operating in Spain, this means preparing for detailed sustainability data collection, value chain analysis, and audit-ready reporting processes that go far beyond previous non-financial reporting obligations.