5.6 Timeline and Recommended Steps for Companies
The application of the CSRD will take place in the following stages:
January 2024 for companies already subject to the NFRD;
January 2025 for listed and large companies that are not currently subject to the NFRD;
January 2026 for listed SMEs, small and non-complex credit institutions, and captive insurance companies; and
January 2028 for third-country companies.
Given the considerable preparatory work involved, it is advisable to take the following key steps in relation to European reporting obligations:
Check the reporting requirements: Determine whether and from when the company will be subject to the CSRD reporting requirements and identify which business units are affected.
Evaluate the details and pros and cons of the various reporting options: Decide whether the required information will be published at group level or on a country-specific basis.
Conduct a gap analysis: The gap analysis is intended to identify the differences between the current state of reporting and the level that is to be reached and is required under the new CSRD draft.
Expand the materiality assessment according to the ESRS: If a materiality assessment is already being conducted, the requirements and provisions of the ESRS should be well understood to establish this practice effectively and to be prepared in advance to meet legal obligations.
Set up an ESG reporting database that best suits the company.
Confirm ESG data sources and address ESG data gaps: For the sustainability report to be credible, it must be based on reportable, auditable, and high-quality data.
Set up reporting processes and a robust ESG reporting framework.
Establish ESG reporting governance: To guarantee long-term ESG success, the company should have a clear governance, structure, and accountability system.
Review dependencies on other applicable reporting standards and identify quick wins from them.
Reduce greenwashing risk: Greenwashing risks emerge in a variety of risk categories, such as strategic, legal, compliance, and reputational. It is therefore important to identify such risks in a timely manner.
Align with key investors and finance providers: The investor perspective is important for identifying ESG priorities and the most important disclosure areas.
Involve the auditor: It is advisable to involve the auditor early on, particularly for unresolved issues and areas where there is room for interpretation. This reduces the likelihood of last-minute surprises at the end of the process.