Sustainability is no longer optional — it is a legal obligation for thousands of companies across Europe. The new CSRD Directive redefines how businesses must report their environmental, social, and governance (ESG) impact. What does this mean for your business? Are you ready to comply?

What is the CSRD and Why Does it Matter?

The Corporate Sustainability Reporting Directive (CSRD) is a European Union directive adopted at the end of 2022 and in force since January 2023. Its objective is to make the sustainability information reported by companies more transparent and comparable.

It replaces and expands upon the previous NFRD (Non-Financial Reporting Directive), and multiplies the number of organizations required to report. It is estimated that the number of companies affected has grown from around 11,700 under the NFRD to more than 50,000 under the CSRD.

Which Companies Are Required to Comply?

The CSRD will be applied in several phases, depending on the size and type of company. Following a recent postponement approved in April 2025, the deadlines are as follows:

First phase (2024): Companies already subject to the NFRD → First report in 2025.

Second phase (2028): Large companies not subject to the NFRD that meet at least two of the following criteria: more than 250 employees, more than €50 million in turnover, or more than €25 million in assets.

Third phase (2029): Listed SMEs → with the option of a voluntary delay until 2030.

Non-EU companies will also be required to comply if they generate more than €150 million in annual turnover in the EU and have at least one significant subsidiary or branch on European territory.

What Exactly Does the CSRD Require?

The directive requires companies to report information based on common standards known as ESRS (European Sustainability Reporting Standards). The key areas that must be covered are environmental factors — including carbon emissions, energy use, biodiversity, and circular economy — social factors such as working conditions, gender equality, and human rights, and governance covering business ethics, anti-corruption policies, and diversity in leadership.

Furthermore, the information must be externally audited, included in the annual management report, and published in a machine-readable digital format (XHTML).

What Changes Compared to Previous Regulations?

Unlike the NFRD, which left a great deal of room for interpretation, the CSRD standardizes content and measurement criteria. It also introduces the principle of double materiality: companies must report both on how they affect the environment and on how ESG risks affect their business. This requires a genuine transformation in the way sustainability is managed and communicated within the organization.

How Can Your Company Prepare?

The key is to act ahead of time. Here are some recommended steps:

1. Initial diagnosis. Assess the current level of compliance against the new requirements.

2. Identify double materiality. Conduct an ESG impact and risk analysis, covering both internal and external aspects.

3. Improve data collection. Ensure your company has robust systems in place to record environmental, social, and governance metrics.

4. Train teams and seek advice. Create a cross-functional sustainability team and, if necessary, collaborate with external experts.

5. Prepare the report in accordance with the ESRS. Familiarize yourself with the mandatory standards, which have already been published by EFRAG and are available for use.

Conclusion

The CSRD represents a profound shift in corporate responsibility across Europe. While deadlines have been extended to give companies more time, the moment to act is now. Adopting a solid ESG strategy not only ensures regulatory compliance, but also strengthens reputation, improves access to sustainable financing, and positions your company favorably with investors, customers, and talent.

At QALEON, we understand that adapting to new sustainability requirements such as the CSRD is not just a legal obligation, but a strategic opportunity. That is why we have developed SineQia®, an AI-powered 360 platform that enables companies to monitor their ESG metrics in real time, assess their double materiality, and generate reports aligned with European standards (ESRS).

With SineQia® your company can anticipate regulatory changes, automate compliance, and make sustainable decisions based on reliable and up-to-date data. Because sustainability is not just a report — it is a strategy for the future.