1. The Compliance Timeline: Who reports when?
The Corporate Sustainability Reporting Directive (CSRD) phases in over several years, replacing the Non-Financial Reporting Directive (NFRD). The critical mistake companies make is waiting until the reporting year to begin data collection.
| Company Type | Data Collection Year | Report Published |
|---|---|---|
| NFRD Subject Companies | 2024 | 2025 |
| Large Enterprises (>250 employees, €50M revenue) | 2025 | 2026 |
| Listed SMEs | 2027 (opt-out till 2029) | 2028 |
Note: Thresholds were updated in late 2023 to account for inflation, raising the balance sheet and net turnover criteria by 25%.
2. Structuring the Double Materiality Assessment
Double materiality is the cornerstone of the ESRS. It mandates that you evaluate sustainability topics through two distinct lenses. If a topic is material in either dimension, it must be reported.
- Impact Materiality (Inside-Out): How your business impacts people and the environment.
- Financial Materiality (Outside-In): How sustainability matters trigger financial risks or opportunities for your business.
For a detailed breakdown of scoring mechanisms, refer to our Double Materiality Methodology Guide.
3. Mapping the 1,144 Datapoints
EFRAG published an Excel workbook detailing up to 1,144 individual datapoints across the ESRS. However, a significant portion are subject to the outcome of your materiality assessment.
Mandatory vs. Subject to Materiality:
- ESRS 2 (General Disclosures): Mandatory for all companies under CSRD. No exceptions.
- ESRS E1 (Climate Change): Technically subject to materiality, but if deemed non-material, you must provide a detailed justification. For 99% of manufacturing or logistics firms, this is material. Read our Scope 3 Guide for implementation details.
- Other Topical Standards (E2-E5, S1-S4, G1): Entirely dependent on your double materiality results.
Technical Insight: The Data Gap
Most organizations find their largest gap is in Policies, Actions, and Targets (PATs). It is not enough to report a metric (e.g., water consumption). You must report the board-level policy governing it, the specific actions taken to reduce it, and the time-bound targets you have set.
4. Preparing for Limited Assurance
Your CSRD report must be audited. Initially, this requires "limited assurance," but will transition to "reasonable assurance" (the same level as financial audits) by 2028. To pass limited assurance, auditors look for:
- Documented Process: A traceable, repeatable methodology for how you conducted your double materiality assessment.
- Data Lineage: The ability to trace a reported emission figure back to the raw source (e.g., utility bill or supplier API), including calculation methodologies.
- Controls: Evidence of internal review processes and sign-offs before data was finalized.