ESG reporting (CSRD)

What is ESG reporting under CSRD?

ESG reporting under CSRD refers to sustainability reporting required by the Corporate Sustainability Reporting Directive, adopted by the European Union to expand and standardise non-financial disclosures. In practice, it means that qualifying companies must report not only selected environmental, social and governance data, but also explain how sustainability matters affect the company and how the company affects people and the environment. This approach is commonly described as double materiality and forms one of the central features of the CSRD framework.

The CSRD replaces and significantly broadens the earlier Non-Financial Reporting Directive. It applies to a wider group of entities, introduces more detailed reporting obligations, requires reporting in accordance with the European Sustainability Reporting Standards (ESRS), and is designed to improve comparability, consistency and reliability of sustainability disclosures across the EU. The legal basis is set out primarily in Directive (EU) 2022/2464, while the first set of detailed standards was adopted by Commission Delegated Regulation (EU) 2023/2772.

From a legal and compliance perspective, ESG reporting is no longer treated as a voluntary communication exercise for many businesses. It is becoming a regulated reporting area linked to management duties, internal controls, data governance, risk management, supply chain processes and, in many cases, assurance preparedness. For companies operating in or connected with the EU market, CSRD may also affect contractual relations, financing, group reporting and stakeholder expectations.

What does ESG reporting under CSRD cover?

CSRD reporting covers a structured set of sustainability disclosures based on ESRS. These standards include general disclosures and topic-specific requirements relating to environmental, social and governance issues. Depending on the outcome of the materiality assessment, a company may need to report, among other things, on climate change, pollution, water and marine resources, biodiversity, resource use and circular economy, workforce matters, workers in the value chain, affected communities, consumers and end-users, and business conduct.

In practical terms, ESG reporting may require a company to describe its sustainability governance, policies, targets, action plans, due diligence processes, principal risks, impacts and metrics. This often includes greenhouse gas emissions data, where relevant, transition planning, workforce indicators, governance arrangements, whistleblowing systems, anti-corruption measures and selected value chain information. Numerical disclosures and methodologies should follow the applicable ESRS requirements, and where estimates are used, they should be properly supported and documented.

The scope of application is phased. Under the current EU framework, reporting obligations first apply to entities already subject to the previous non-financial reporting rules, then to other large undertakings, and later to certain listed SMEs, subject to transitional rules and later legislative developments at EU level. Because the regulatory timeline has been subject to public debate and proposed amendments in some areas, companies should verify their status against the latest binding legal acts and implementation rules in the relevant jurisdiction.

When should a company seek legal support for CSRD compliance?

Legal support is particularly useful when a business is determining whether it falls within the CSRD scope, identifying the reporting perimeter, assessing group structures, or allocating responsibilities between management, compliance, finance, HR, procurement and sustainability teams. This is especially important for capital groups, companies with foreign parents or subsidiaries, regulated businesses, and entities relying on complex value chains or outsourced reporting inputs.

Support may also be needed when preparing a double materiality assessment, drafting governance and internal reporting rules, reviewing contracts for ESG data flows, addressing director liability concerns, or aligning ESG reporting with other regulatory obligations. In many organisations, CSRD overlaps with financial reporting, supply chain due diligence, anti-corruption frameworks, labour issues, tax transparency, data governance and sector-specific compliance obligations. A narrow reporting-only approach may therefore be insufficient.

Early consultation can help reduce the risk of incomplete disclosures, inconsistent methodologies, weak internal controls or statements that are difficult to defend in the event of assurance review, investor scrutiny or regulatory inquiry. It may also help avoid greenwashing-related concerns, contractual disputes, reputational harm and unnecessary implementation costs caused by delayed or fragmented compliance work.

Because CSRD reporting is tied to formal reporting cycles and assurance-readiness, problems are often easier and less expensive to address before the reporting framework is finalised. A company that maps its obligations early can better organise internal responsibilities, secure reliable data sources and integrate sustainability disclosures into existing governance and reporting processes.

Legal support in the area of ESG reporting under CSRD may include in particular:

assessment of whether the company or group falls within the CSRD scope,
review of reporting obligations under CSRD and ESRS,
support with double materiality assessment from a legal and governance perspective,
preparation or review of internal policies, reporting procedures and management responsibilities,
analysis of ESG-related contractual clauses and value chain information flows,
advice on governance, board oversight and liability risks,
support in aligning sustainability reporting with financial reporting and compliance frameworks,
review of public ESG statements and disclosures to reduce legal and regulatory risk,
assistance during assurance preparation, audits and regulatory questions.

Need support with ESG reporting under CSRD? Contact us.

ESG reporting (CSRD)