While CSRD is an EU directive, its reach extends beyond European borders. Non-EU companies with significant EU-based operations or revenues will also fall under its scope. Reporting obligations are being phased in, with large companies first, followed by smaller firms, but regardless of where you are in that timeline, early preparation is the smartest investment you can make.

The Double Materiality Assessment

At the core of CSRD lies the double materiality assessment, a structured process that looks at sustainability from two directions. Your double materiality assessment determines which of these standards apply to your business and at what level of detail.

• Impact materiality: How does your business impact people and the environment, both positively and negatively, across your value chain?
• Financial materiality: How do sustainability issues create risks and opportunities that affect your business’s financial performance and long-term viability?

Together, these two lenses determine which ESRS topics are material for your company and therefore what you are required to disclose. Getting this assessment right is the foundation of a credible, proportionate CSRD response.

The ESRS Standards

• Cross-cutting standards: General principles and strategy, governance, and materiality assessment applying across all disclosures.
• Environment (ESRS E1–E5): Climate change, pollution, water and marine resources, biodiversity and ecosystems, and resource use and circular economy.
• Social (ESRS S1–S4): Own workforce, workers in the value chain, affected communities, and consumers and end-users.
• Governance (ESRS G1): Business conduct, anti-corruption, and responsible lobbying.