CSRD: what are we talking about?

The CSRD (for Corporate Sustainability Reporting Directive) is an EU directive that came into effect at the beginning of 2023. It requires most listed companies and non-listed large companies (among others) to annually publish a sustainability report. The disclosure requirements relate to environmental, social, and governance (ESG) topics. From the use of material resources to pollution, including workers and biodiversity, in-scope undertakings will have to publish data that provides transparency on the impact and opportunities that their activities pose to the environment, as well as the risks they are exposed to - including in their value chain, meaning at the level of their suppliers, and even after their products or services have been sold to their customers.

The CSRD is an ‘amending EU Directive’, meaning that it revises the existing regulations on non-financial reporting in the EU. The CSRD entered into effect on 5 January 2023, and EU Member States should have incorporated its provisions into national law by 6 July 2024 (18 months from the effective date).

The directive sets forth the baseline; thus, Member States may add provisions during this period but cannot eliminate any of the requirements in the CSRD. The CSRD does, however, allow for EU Member States to make several elections during the transposition process (for example, language requirements for reporting, expansion of assurance providers beyond the statutory auditor).

Is my company in scope?

The European legislator has not been idle with regard to the scope of the CSRD. As a result, the following entities are in scope:

Companies already subject to the 2014 Non-Financial Reporting Directive (NFRD). That is, essentially, large EU 'public interest entities' with regulated market listed securities, credit institutions and insurance companies with more than 500 employees.  

Parent companies of a large group. Large groups are groups consisting of parent and subsidiary companies included in a consolidation, fulfilling at least two of the following criteria (on two consecutive balance sheet dates):

  • a balance sheet total exceeding €25,000,000
  • a net turnover exceeding €50,000,000
  • an average of more than 250 employees during the financial year (on a consolidated basis).

All 'large' EU companies fulfilling at least two of the following criteria (on two consecutive balance sheet dates):

  • a balance sheet total exceeding €25,000,000
  • a net turnover exceeding €50,000,000
  • an average of more than 250 employees during the financial year.

Listed small and medium-sized enterprises, with mitigated disclosure requirements and the ability to opt-out until 2028.

Listed non-EU companies (with the exception of micro undertakings) with securities listed on an EU regulated market. Those include debt securities with denominations of less than €100,000 or equivalent listed on an EU regulated market. It is noted that the directive does not apply to securities listed on EU multilateral trading facilities.


May I benefit from an exemption? 

Even if your company exceeds certain thresholds mentioned above and find itself potentially within the scope of CSRD, it may still be possible for it to fall under one of the following exemptions:

  • AIF and UCITS exemption - The CSRD does not apply to the financial products of AIF and UCITS. However, it is still unclear whether the provision of ancillary products or services (e.g., providing investment advice in relation to an AIF or UCITS) is exempted.
  • Subsidiary undertaking and Intermediate holding exemptions - Companies that are subsidiaries may, under certain conditions, be exempted from the obligation to include the sustainability information required by CSRD in their management report when these companies are included in the consolidated management report of the parent company, including the sustainability information required by, and prepared in accordance with, the CSRD.

The management report of the exempted subsidiary must mention the following information:

    • the name and registered office of the parent company publishing the information at group level;
    • the internet links to the consolidated management report of the parent company or, where applicable, to the consolidated sustainability information of the parent company, and to the assurance statement on the compliance of the sustainability information with CSRD requirements;
    • information stating that the subsidiary is exempt from the sustainability information reporting obligations.

Subsidiaries (including EU subsidiaries) of a non-EU parent may also apply this exemption if the parent reports in accordance with the CSRD or sustainability reporting standards that are deemed to be equivalent by the EU. At the moment, it is not envisaged that the EU will declare any sustainability reporting standards equivalent to the European Sustainability Reporting Standards in the near future.

However, these exemptions do not apply to subsidiary undertakings or intermediate holdings that qualify as large undertakings and have securities (debt or equity) listed on a regulated market in the EEA.

  • Artificial consolidation - Until 6 January 2030, in-scope EU subsidiary undertakings with a non-EU parent undertaking may prepare a consolidated sustainability report including all such in-scope EU subsidiary undertakings. Such consolidated sustainability report is to be prepared by the in-scope EU subsidiary undertaking that generated the greatest turnover in the EEA in at least one of the preceding five financial years, on a consolidated basis where applicable.

What about the transposition of CSRD in our home markets?

The Netherlands

In the Netherlands, the CSRD is implemented by a bill (wet) and a decree (algemene maatregel van bestuur). Both the bill and the decree are still in draft form and the precise timeline regarding the implementation are not yet known.

The draft Implementation Bill for the CSRD deals with the requirements for auditors and audit firms if they are going to audit sustainability reporting. The draft Implementation Decree for the CSRD provides for which companies will be subject to the obligation to include sustainability in formation in their management board report. In line with the CSRD, caters for a phasing in of the sustainability reporting requirements from 2024 to 2028 along the categories companies indicated above.


The Luxembourg implementing legislation in respect of the CSRD – draft bill. No 8370 – was introduced by the Minister of Justice before the Luxembourg parliament on 29 March 2024 (Luxembourg Bill).

The Luxembourg Bill proposes the amendment of several laws that regulate the accounting and reporting obligations of Luxembourg companies and partnerships, including, the Luxembourg law of 19 December 2002 on the register of commerce and companies and the accounting and annual accounts of companies, the Luxembourg law of 10 August 1915 on commercial companies, the Luxembourg law of 17 June 1992 on the accounts of credit institutions and the Luxembourg law of 8 December 1994 on the annual and consolidated accounts of insurance and reinsurance companies.

In addition, the Luxembourg Bill proposes to amend the Luxembourg law of 23 July 2016 on the audit profession and the Luxembourg law of 11 January 2008 on the transparency requirements for issuers.

The Luxembourg Bill as it currently stands, reflects that Luxembourg has chosen to permit entities to exclude commercially sensitive information from their sustainability report where such would be prejudicial to such entity’s commercial position.

The precise timeline regarding the implementation of the Luxembourg Bill is not yet known.


In Belgium, the process, initiated at the end of 2023, is coordinated by the SPF Economy, in collaboration with the SPF Foreign Affairs and the SPF Justice. Although no text has been made publicly available, a draft bill is currently being reviewed by the Belgian Council of State. The Belgian government has also indicated its intention to vote on the law in next September.

The National Bank of Belgium has also taken some steps as it recently published a list. This list provides an overview of non-financial companies that will be subject to the CSRD reporting standard, based on data included in the statutory annual accounts filed by 31 December 2022, divided into three groups:

  • Group 1: Large listed companies, insurers that exceed at least two of the three criteria (500 employees, net revenue of €50 million, or total assets of €25 million).
  • Group 2: Companies, credit institutions, insurers that exceed at least two of the three criteria (250 employees, net revenue of €50 million, or total assets of €25 million).
  • Group 3: Small and medium-sized listed companies, credit institutions, insurers that exceed at least two of the three criteria (10 employees, net revenue of €900.000, or total assets of €450.000).

Should you have any questions, please contact a member of our ESG focus group or your regular trusted contact at Loyens & Loeff.