Navigating the New Era of ESG Reporting: ESRS & CSRD Explained

Want to understand more about ESG reporting in the EU? We break down everything you need to know about the ESRS and CSRD.

As sustainability becomes an increasingly vital part of corporate responsibility, new regulations are coming into play to ensure businesses are held accountable for their environmental and social impacts. In Europe, the European Sustainability Reporting Standards (ESRS) and the Corporate Sustainability Reporting Directive (CSRD) are reshaping the way companies both shape and disclose their sustainability efforts.?

If you're unfamiliar with these terms or uncertain about what they mean for your business, this guide will break down everything you need to know and explain how you can prepare for compliance in this new era of mandatory sustainability reporting.?

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Overview of mandatory reporting under ESRS and CSRD?

Both the ESRS and CSRD are designed to bring more transparency and consistency to corporate sustainability reporting across the European Union (EU). These regulations aim to align sustainability reporting with financial reporting, ensuring that environmental, social, and governance (ESG) factors are integrated into corporate disclosures.?

The CSRD was introduced to amend and strengthen the previous Non-Financial Reporting Directive (NFRD), making it mandatory for more companies to report on ESG matters. This directive broadens the scope to include nearly 50,000 companies in Europe, compared to 11,000 under the NFRD. This means that even small- to medium-sized enterprises (SMEs) and non-EU companies with EU operations are now required to disclose their sustainability performance.?

The ESRS set the framework for how companies should structure their sustainability disclosures, covering everything from climate change impacts to social and governance factors. Together, the ESRS and CSRD ensure that businesses not only report on their sustainability actions but do so in a standardised, transparent manner that allows for comparison across industries and borders.?

The importance of ESRS: Why it matters for companies across Europe and beyond?

The introduction of the ESRS is a major step toward standardised sustainability reporting, not just in Europe but globally. For years, businesses have struggled with inconsistent reporting standards, making it difficult for investors, stakeholders, and the public to assess and compare their sustainability impacts. With the ESRS, companies now have clear guidelines on what to report and how to do it.?

For companies, this means:?

• Increased transparency: Investors and consumers are demanding more visibility into how companies manage their environmental and social impacts.?

• Improved accountability: The ESRS holds businesses accountable for their actions by requiring specific, measurable disclosures on key ESG metrics.?

• Alignment with global frameworks: ESRS aligns with international frameworks like the Task Force on Climate-related Financial Disclosures (TCFD), ensuring your company meets global expectations.?

Not only does this create a level playing field for businesses, but it also opens up opportunities for those who take their sustainability commitments seriously. Companies that lead the way in transparent, comprehensive ESG reporting can differentiate themselves from competitors and attract socially conscious investors and consumers.?

Key CSRD requirements: What you need to know about the CSRD?

The CSRD is the backbone of this new reporting landscape, and understanding its requirements is essential for businesses operating in or with the EU. Here are some of the most critical aspects of the directive:?

1. Broader Scope: Unlike its predecessor, the CSRD applies to more businesses, including large companies, listed SMEs, and non-EU businesses with significant EU operations. This means that even if your company is based outside the EU, you could still be required to comply if you meet certain thresholds.
2. Detailed Disclosure Requirements: The CSRD mandates that companies report on a range of ESG topics, including but not limited to:?climate change mitigation and adaptation / water and marine resources / biodiversity and ecosystems / human rights and social issues / diversity and inclusion in the workplace.?
3. Assurance: One of the most significant changes under the CSRD is the requirement for limited assurance of sustainability reports. This means that an independent auditor must verify the information provided, ensuring that the data is accurate and trustworthy.?
4. Double Materiality: The CSRD emphasises the concept of double materiality, which requires companies to disclose not only how sustainability issues affect their business but also how their business impacts the environment and society. This dual perspective ensures a comprehensive understanding of a company's sustainability performance.?
5. Digital Format: The CSRD also introduces a requirement for companies to prepare their sustainability disclosures in a digital, machine-readable format, aligning with the EU's broader push for digitalization in corporate reporting.?

How Rewild can help: Guiding companies through ESG reporting?

Navigating these complex reporting requirements can feel overwhelming, especially for companies unfamiliar with ESG reporting or the latest regulatory changes. That’s where Rewild comes in.?

At Rewild, we specialise in helping businesses understand and comply with evolving sustainability standards like ESRS and CSRD. Our services cover the full spectrum of sustainability reporting, from carbon accounting and materiality assessments to preparing and verifying reports in line with global frameworks.?

Here’s how we can support your business:?

• Carbon accounting & climate risk analysis: Ensure your climate data and risk frameworks are accurate and align with the new reporting requirements.?

• Materiality & double materiality analysis: We’ll help you identify what’s most important to your business and your stakeholders, which will inform the data points you are required to disclose under the CSRD.?

• Sustainability auditing & compliance: Whether you need help with internal audits or third-party verification, we provide tailored services to meet your needs.?

• Full-scale sustainability strategy & planning: Beyond reporting, we help you integrate sustainability into your core business operations.?

Our team of experts is equipped to handle the intricate details of ESG reporting, so you can focus on driving positive change in your business while remaining fully compliant.?

Act now to ensure compliance and take the lead in ESG transparency?

The future of corporate transparency is here, and businesses that embrace it will gain a competitive edge. With the ESRS and CSRD now in place, it’s essential to act early to ensure compliance and avoid potential penalties.?

By adopting comprehensive sustainability reporting practices, you’ll not only meet regulatory requirements but also position your company as a leader in sustainability—building trust with investors, customers, and the wider public. If you’re ready to take the next step, contact Rewild today to see how we can support your ESG reporting journey.?