Automated and Assurance Ready CSRD (ESRS) Report

What is CSRD?

The Corporate Sustainability Reporting Directive is European Union legislation that came into effect on 5 January 2023. It requires EU businesses, including qualifying subsidiaries of non-EU companies, to disclose their environmental and social impacts alongside how ESG actions affect their overall business performance. Introduced as part of the European Commission's Sustainable Finance Package, CSRD ESG reporting significantly expands on its predecessor, the Non-Financial Reporting Directive — offering greater scope and stronger reporting requirements.

Double Materiality

CSRD is built on the concept of double materiality. Organisations must report both how their activities impact the planet and people and how sustainability risks and measures affect their financial health. All disclosures must be publicly available and subject to third-party auditing for accuracy and completeness.

Global Reach

For companies exporting to or operating within the EU, the directive carries clear implications. Non-EU parent companies generating annual EU revenues of at least €150 million are within its scope. Investors, analysts, consumers, and stakeholders are increasingly relying on CSRD disclosures to evaluate sustainability performance and understand related business risks. The goal is to provide clearer, more consistent, and comparable ESG data that supports better-informed decisions across global markets.

Why CSRD is Important for Businesses

CSRD is reshaping how businesses report on sustainability. It has made disclosure mandatory, standardised, and auditable. For companies operating in or trading with the EU, compliance is a necessity.

• CSRD mandates sustainability reporting under the European Sustainability Reporting Standards (ESRS).
• Standardised and audited disclosures give investors comparable and reliable CSRD ESG data.
• Double materiality reporting helps companies understand how sustainability issues affect the business and how the business impacts the environment and society.
• Companies with strong CSRD-aligned reporting are better positioned in procurement decisions, partnerships, and global market access.
• Large companies must report on value chain impacts to increase disclosure pressure on suppliers and business partners.

CSRD vs NFRD: Key Differences

CSRD builds significantly on its predecessor, the Non-Financial Reporting Directive, expanding both the scope of reporting and the rigour of disclosure requirements.

The shift highlights how CSRD standards introduce greater structure, comparability, and auditability in ESG reporting.

Who Does CSRD Apply To?

CSRD applies to a significantly wider range of organisations. Following the Omnibus I simplification package, reporting requirements are concentrated on larger companies with over 1,000 employees and over €450M net annual turnover.

Does CSRD Apply to My Company?

When Does the Company Not Need to Participate?

Companies with fewer than 1,000 employees are not required to provide sustainability data to larger business partners beyond voluntary reporting schedules. However, global suppliers to EU-regulated companies should monitor their exposure as disclosure expectations evolve across supply chains.

ESRS: 12 Standards Explained

The European Sustainability Reporting Standards are organised across two cross-cutting standards and three topical categories. CSRD ESG standards cover environmental, social, and governance disclosures across 12 ESRS standards.

Cross-cutting Standards

Environmental (ESRS E1–E5)

Social (ESRS S1–S4)

Governance (ESRS G1)

Double Materiality Under CSRD

CSRD requires organisations to assess materiality from two perspectives — financial and impact — forming the basis of CSRD ESG compliance under the double materiality framework. Both dimensions play a critical role in determining a company's CSRD rating.

Organisations must assess each ESRS topic against both dimensions. A topic is considered material if it meets the threshold of either financial or impact materiality (or both), and therefore requires detailed disclosure.

CSRD Disclosure Requirements

CSRD requires organisations to report environmental, social, and governance impacts — central to CSRD ESG disclosure requirements — alongside value chain disclosures.

Environmental (ESRS E1–E5)

• Greenhouse gas emissions: Scope 1, 2, and 3
• Climate transition plans aligned with EU targets
• Pollution, water consumption, and biodiversity impacts
• Resource use and circular economy strategies

Social (ESRS S1–S4)

• Workforce conditions, labour rights, and equal opportunities
• Worker health, safety, and well-being
• Human rights risks across the value chain
• Impacts on communities and consumers

Governance (ESRS G1)

• Governance structure and sustainability oversight
• Business conduct, ethics, and anti-corruption processes

Value Chain Disclosures

• Material risks and impacts spanning both upstream and downstream business relationships
• Focus on high-risk hotspots and critical supply dependencies

Oren's CSRD Reporting Approach

Oren combines AI-powered technology and sustainability expertise to deliver structured, accurate, and scalable CSRD compliance.

Consequences of Not Adopting CSRD

Failing to comply with CSRD ESG carries risks beyond regulatory penalties. It affects financial standing, legal exposure, and long-term reputation.

1. Financial penalties

Non-compliance results in fines calculated on company size and violation severity, directly impacting the bottom line and financial stability.

2. Legal repercussions

Regulatory authorities can initiate investigations, audits, and lawsuits. Legal proceedings consume significant time and resources, diverting focus from core business operations.

3. Loss of investment access

Non-compliance signals a lack of transparency to investors, limiting access to sustainable investment funds and procurement contracts.

4. Reputational damage

Public censure and media scrutiny degrade stakeholder trust, threatening brand credibility, customer relationships, and stock performance.

5. Competitor disadvantage

Organisations falling behind on CSRD find it harder to attract capital and remain relevant in an increasingly accountability-driven market.