CSRD: Everything you need to know about the directive in 2025

Last updated: 07 / 11 / 2025

La CSRD, ou Corporate Sustainability Reporting DirectorThe CSRD is a European directive that harmonizes non-financial reporting within the EU. Adopted in November 2022, it replaces the NFRD directive and is part of the European Green Deal strategy. Since its application on January 1, 2024, the CSRD requires companies to publish a report on their environmental, social, and governance (ESG) performance and introduces the key principle of dual materiality.

Definition, challenges, new developments, ETERNITY Systems explains everything you need to know about the CSRD to understand and effectively implement this directive.

The CSRD directive in summary
What is the CSRD?
What is the dual materiality implemented by the CSRD?
Which companies are affected by the CSRD?
What is the implementation schedule for the CSRD directive?
What are the objectives of the CSRD?
What are the publication requirements of the CSRD directive?
What are the penalties for non-compliance with the CSRD?
How to prepare for and anticipate compliance with the CSRD directive?
FAQ

Summary

The CSRD directive in summary

The CSRD directive harmonizes sustainability reporting in Europe and requires companies to publish reliable, verified and comparable environmental, social and governance data.
ESRS standards (European Sustainability Reporting Standards) structure this reporting around the principle of double materialitywhich requires assessing both the impact of activities on the environment and society and the influence of sustainability issues on economic performance.
These ESRS standards define the indicators and content of the reporting, ensuring comparability and reliability of data at the European level.
Preparing for the CSRD requires a cross-functional organization: structuring governance, ensuring reliable data collection, anticipating audits and integrating sustainability into the company's overall strategy.

What is the CSRD?

The Corporate Sustainability Reporting Directive (CSRD) is a new European directive that defines the rules for non-financial reporting by companies in the European Union. It governs the publication of environmental, social and governance (ESG) information in order to to make this data more accessible and transparent at the EU level.

This CSRD reporting aims to harmonize the communication of sustainability performance to meet an overall objective: to achieve carbon neutrality by 2050 and to orient economic models towards responsible growth.

The CSRD aligns with other European regulatory frameworks, such as the Green Deal, the SFDR (Sustainable Finance Disclosure Regulation) and the duty of careThis harmonization allows to unify transparency practices so that sustainable commitments are understandable to all.

CSRD and NFRD: the major changes

The NFRD (Non Financial Reporting Directive) was a directive which aimed to harmonize reporting, translated in France by the Extra-Financial Performance Declaration (DPEF).

The NFRD gives way to the CSRD, which strengthens the framework and broadens the scope of application with 5 major changes:

More accurate and verifiable information Companies must now publish detailed data on their environmental, social and governance impacts according to specific indicators: greenhouse gas emissions, energy consumption, waste management, share of renewable energy or even pay equality.
A unified digital format : the reporting is integrated into a dedicated section of the management report, written in XHTML format and structured according to a common European structure to guarantee the comparability of the data.
A broad scope of application : approximately 50,000 European companies will eventually be affected, including many SMEs and subsidiaries that were previously exempt.
An independent verification : the published information must be audited by an auditor or an independent third-party organization such as Bureau Veritas or EcoAct, in order to ensure its reliability.
The principle of dual materiality : each company must now assess both its impact on society and the environment, and the effect of sustainability issues on its own economic performance.

What is the dual materiality implemented by the CSRD?

The principle of dual materiality is an approach that requires companies to analyze their sustainability performance from two complementary perspectives: the impact of ESG issues on their business, and the impact of their activity on society and the environment.

Financial materiality It assesses how environmental, social, and governance issues influence the company's financial situation. For example, rising energy costs, resource scarcity, or climate risks can affect profitability, investments, or the supply chain.
The materiality of impact It measures the positive or negative effects of the company on its broader ecosystem: environment, working conditions, human rights, local communities. This includes, for example, greenhouse gas emissions, waste management, or the social practices of suppliers.

When an impact or risk is deemed significant, It must be mentioned in the sustainability report. This approach marks a major evolution in non-financial reporting: it is no longer simply a matter of stating commitments or intentions, but of to concretely measure the real effects of the company's activities, and to assess the economic consequences.

Which companies are affected by the CSRD?

The CSRD directive This applies to businesses according to certain thresholds: based on their size, legal status, and geographical location. It therefore most often concerns:

Large European companies
Listed SMEs
Non-European companies
Subsidiaries and branches

Large European companies

all major European companies are affected by the CSRD standard, whether they are listed or not, provided they exceed at least two of the following three CSRD thresholds:

1000 employees

40 million euros in turnover

20 million euros in total on the balance sheet

These companies must publish an annual sustainability report that complies with ESRS standards (European Sustainability Reporting Standards), integrated into their management report and verified by an auditor or an independent third-party organization.

In 2025, the European Commission proposed, via an "omnibus" package, to reduce the number of companies subject to the CSRD This includes raising the employee threshold to over 1,000 and adding a net revenue threshold of €450 million. These measures are still under discussion and are not yet applicable.

Listed SMEs

small and medium-sized enterprises listed on European regulated markets also fall within the scope of the CSRD. However, They benefit from a simplified system. with simplified reporting and a transition period before the full implementation of the obligations. These companies will thus be able to postpone the publication of their first sustainability report until 2028 (based on data from the 2027 financial year).

Non-European companies

foreign companies that conduct significant economic activity in the European Union and generate more than 150 million euros in annual revenue in the EU market must publish a sustainability report covering its environmental, social and governance (ESG) impacts.

Subsidiaries and branches

European subsidiaries whose parent company prepares consolidated reports Companies may be exempt from submitting an individual CSRD report. However, these companies must still provide certain data to ensure consistency in the information published at the group level. Large listed companies are not eligible for this exemption.

Micro-enterprises

Micro-enterprises are excluded from the scope of the CSRD directive. The following structures are considered micro-enterprises:

With 10 employees or fewer
Generating a turnover or balance sheet total of less than 2 million euros

They are not subject to an obligation of extra-financial reporting. but may choose to publish them voluntarily through the CS3D to promote their CSR approach.

What is the implementation schedule for the CSRD directive?

In April 2025, the European Union officially adopted a two-year postponement of the application of the CSRD directive. for certain categories of businesses.

In France, the DDADUE 5 lawThe law, promulgated on April 30, 2025, transposes this postponement into national law. It directly concerns large companies and listed SMEs, which now have additional time before integrating sustainability information into their management report.

Companies already subject to the NFRD are still required to publish their first CSRD report in 2025.based on the 2024 financial year. The deferral applies only to new entrants into the scheme.

What are the objectives of the CSRD?

The CSRD directive aims to standardize the non-financial reporting of European companies to make ESG information more accessible and easier to compare and analyze. To achieve this, it pursues four main objectives:

Create a common language : the CSRD aims to establish precise indicators via ESRS standards to monitor environmental, social and governance impacts.

Aligning strategies with the climate transition : The aim is to help organizations stay on track towards carbon neutrality, in line with the Paris Agreement and the 1,5°C limit.

Promoting a sustainable economy : this is about improving the transparency of ESG data to direct capital towards responsible companies and strengthen European green finance.

Build confidence : the aim is to establish clear and verifiable reporting, which guarantees credibility with investors, clients and public authorities.

What are the publication requirements of the CSRD directive?

The CSRD directive requires companies to publish an annual sustainability report integrated into their management report. according to a format and standards strictly defined at European level :

Comply with ESRS (European Sustainability Reporting Standards) These standards govern the information to be disclosed on environmental, social, and governance (ESG) aspects. This transparency framework is part of a broader circular economy approach, consistent with other European regulations such as the PPWR regulations (Packaging and Packaging Waste Regulation) and the AGEC law in France which aim to reduce waste, encourage reuse and promote more sustainable production models.
Adopt a single digital format : the report must be published in XHTML format, with standardized markup (XBRL) to facilitate reading and comparison of data across the European Union.
Ensure external verification of information : each report must be audited by an auditor or an independent third-party body to ensure its reliability and compliance.
Include dual materiality analysis Companies must demonstrate both their impact on the environment and society, and the effect of climate issues on their economic performance.

What are the penalties for non-compliance with the CSRD?

The CSRD directive provides for financial and legal sanctions for companies that do not comply with their non-financial reporting obligations.

Administrative fines : each Member State defines the amount and modalities of the sanctions, but they can reach several hundred thousand euros depending on the seriousness of the breach.

Civil or criminal penalties Management can be held liable for misleading, incomplete, or false statements. Indeed, if sustainability information is not certified, the company's director is liable to a fine of €30,000 and a two-year prison sentence. If the company's director obstructs the certification of sustainability information, they are liable to a fine of €75,000 and a five-year prison sentence.
Potential exclusion of certain devices : from 2026, companies that do not comply with their non-financial reporting obligation will be excluded from public procurement at the national level.

In France, the planned sanctions are aligned with and reinforce those already applied for the Non-Financial Performance Statement (DPEF):

A public statement may be published, indicating the nature of the offence and the company involved (“name and shame”).
The competent authority may issue a cease and desist order to compel the company to correct its deficiencies.
Administrative fines penalties will be applied in proportion to the profits received from the offence.

How to prepare for and anticipate compliance with the CSRD directive?

To implement the CSRD standard and anticipate these steps in order to be clear and effective in their reporting, companies must:

Strengthen their CSR strategy
Calculate their carbon footprint
Become familiar with ESRS standards
Stay informed about regulatory developments
Rethinking internal governance
Organize the collection of sustainability data
Engage in dialogue with verification bodies
To get targeted support

Strengthening your CSR strategy

Implementing a robust CSR strategy is the first step towards CSRD compliance where the company conducts an internal audit to identify:

Its priority issues
Its impacts
Its risks

Based on this, she can define a clear action plan, set measurable objectives, and involve her teams in the CSR approachMonitoring indicators and the drafting a CSR report then allow to evaluate the effectiveness of the actions undertaken and to continuously adjust the strategy.

Conduct a carbon footprint assessment

The carbon footprint, or GHG emissions assessment, allows us to measure the greenhouse gas emissions generated by the company. The carbon footprint assessment helps define a realistic decarbonization trajectory. It is an essential reference point for the future sustainability report.

Become familiar with ESRS standards

Understanding the ESRS (European Sustainability Reporting Standards) is essential to approaching the CSRD with confidence. These standards define how to collect and present ESG informationTo achieve this goal, companies must:

To appropriate the logic of dual materiality
Plan the reporting steps
Centralize the data in a consistent format.

Tools such as the European ESAP platform or the French platform Impact facilitate this compliance. Anticipating these requirements saves time and avoids errors when publishing the report.

Stay informed about regulatory developments

To remain compliant, it is essential for companies to to implement active monitoring and to follow new publications, official updates, and recommendations from authorities. Being attentive and constantly monitoring the situation allows you to:

To anticipate changes
To adopt good practices
To better understand listeners' expectations
To limit areas of uncertainty in the preparation of the sustainability report

Rethinking internal governance

Clear internal governance ensures the reliability of information and strengthens the credibility of reporting.ESG issues must be integrated into the overall strategy, involve management, train teams, and clarify roles.

It should be noted that the most advanced companies are now creating specific positions or committees to manage these issues.

Organize the collection of sustainability data

The company must begin by to compile all the data already available (carbon footprint, HR indicators, financial reports, etc.), then identify the missing information and define the new data to be produced to meet the requirements of CSRD reporting.

This step relies on a close collaboration between the different departments Finance, human resources, production, purchasing, logistics, and CSR are all relevant departments. Each department must be involved in gathering and ensuring the reliability of the information. Clear, documented, and traceable data facilitates the verification and certification of the sustainability report.

Engage in dialogue with the verification bodies

Companies have every interest in communicating early and regularly with their auditor or independent third-party organization to clarify expectations, validate calculation methods, and ensure the compliance of the future report. Sharing areas of uncertainty, testing a dataset, or requesting preliminary feedback reduces the risk of adjustments at the end of the process.

To get targeted support

The complexity of CSR often justifies support, such as engaging a consulting firm or a CSR expert, to structure the project, prioritize tasks, and improve efficiency. Support for companies can focus on:

The carbon footprint assessment
The definition of materiality
Data collection
Audit preparation

Choosing the right partners, suited to the size and sector of the company, helps to avoid costly mistakes and to establish a solid and sustainable approach.

La CSRD directive It encourages organizations to measure, structure, and demonstrate their environmental, social, and governance commitments. It promotes more responsible management based on verifiable and comparable data.

ETERNITY Systems supports companies in this evolution by providing them with Packaging tracking and management solutions compliant with new European obligationsOur tools allow us to centralize sustainability data, track material flows, and reduce waste.

FAQ

What are the CSRD thresholds for 2026?

In 2026, the CSRD directive will apply to large companies exceeding at least two of the following three thresholds Companies with 250 employees, €50 million in revenue, or €25 million in total assets will be required to publish their first sustainability report in 2028, based on the 2027 financial year.

Is a carbon footprint assessment mandatory for CSRDs?

Yes, the carbon footprint is one of the pieces of information required for sustainability reporting.Companies must measure their direct and indirect emissions (Scopes 1, 2 and 3) to demonstrate their impact on the climate and their reduction strategy.

What are the indicators of the CSRD?

The CSRD relies on the ESRS standards, which define specific indicators according to three components. :

Environment (emissions, energy, resources)
Social (employment, working conditions, equality)
Governance (ethics, transparency, sustainable strategy)

These indicators allow ESG performance to be tracked in a harmonized manner across Europe.

What ESRS standards should you be aware of?

The ESRS (European Sustainability Reporting Standards) define the content of the sustainability report. They cover environmental, social and governance themes, with cross-cutting standards (ESRS 1 and 2).

The ESRS 1 It covers the general principles of reporting, meaning it defines how a company should construct and present its sustainability report.ESRS 2 It covers the basic information required for all companies. It includes sustainability governance, strategy and business model, CSR policies and objectives, and risk and opportunity management.

How long does it take to prepare a CSRD report? ?

The complete preparation of the CSRD report can take 12 to 24 months. This timeframe depends on the company's CSR maturity, the quality of available data, and the level of scrutiny expected by the audit. Starting early helps avoid delays and allows for the gradual integration of CSR into internal processes.

About the Author

Anthony ADAM

Communications and Marketing Manager at ETERNITY Systems, Anthony designs strategies and content to promote more sustainable consumption. He is a committed agent of change who combines creativity, rigor, and action to strengthen the visibility and impact of projects related to reuse and the circular economy.