Corporate Sustainability Reporting Directive

The EU’s Corporate Sustainability Reporting Directive (CSRD) – formally adopted by the European Council on 28 November 2022 – is transforming ESG reporting.

Starting from 2024, almost 50,000 companies are subject to mandatory sustainability reporting, including non-EU companies which have subsidiaries operating within the EU or are listed on EU regulated markets.

In January 2025, the Commission of the European Union published a ‘Compass for Competitiveness’ (EU Compass) to regain competitiveness and secure sustainable prosperity. In the Competitiveness Compass, the Commission stated that the first of a series of Simplification Omnibus packages will cover far-reaching simplification in the fields of sustainability reporting, sustainability due diligence and taxonomy.

On 26 February 2025, the Commission published its proposal for the first Omnibus package concerning amendments to the EU Accounting Directive (Directive 2013/34/EU), the EU Statutory Audit Directive (Directive 2006/43/EC), the CSRD (Directive (EU) 2022/2464), and the CSDDD (Directive (EU) 2024/1760).

George Richards

Associate Partner, Head of ESG Reporting and Assurance.

KPMG in the UK

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Timing is critical because both the international and the EU sustainability standards will be ready for the FY24 reporting cycle—which presents a challenging timeline for all organisations, not just the most complex. The EU standards will be mandatory for EU companies and many global organisations with operations in the EU. And now the International Sustainability Standards Board (ISSB) timelines are aligned with the EU, companies may choose to voluntarily adopt IFRS Sustainability Disclosures Standards regardless of local requirements.

For those reporting under multiple frameworks, such ‘dual compliance’ with both international and European standards would certainly make sense because the ISSB is setting the global baseline ready for jurisdictions to layer on their local requirements. One could view reporting in accordance with the ISSBTM requirements as a ‘global passport’ for companies operating in multiple jurisdictions. Watch our webinar on demand to find out more about what CSRD means for UK companies.