By Nexio Projects
In 2014, the European Commission adopted the Non-Financial Reporting Directive (NFRD) with the aim of strengthening accountability and helping stakeholders monitor and assess the ESG performance of target companies. In essence, this directive required certain large companies to disclose information about their operations and management of ESG challenges.
The new CSRD builds on the scope of the NFRD and aims to provide more verifiable, accessible, and consistent non-financial data. The CSRD will serve as the new fundamental framework for sustainability reporting and will draw heavily on the structure of the Global Reporting Initiative (GRI) Standards.
It was adopted on April 21, 2021, entered into force on January 5, 2023, and will take effect in 2024. This means that organizations previously required to report under the NFRD will begin reporting in 2025 on progress made in 2024. The CSRD will then expand its scope: in 2026, large companies previously not subject to the NFRD will be required to report; in 2027, listed small and medium-sized enterprises (SMEs); and in 2029, finally all non-EU organizations with significant activities in the EU.