CSRD Reporting: The New Gold Standard for ESG Compliance

C² Team
Jan 26
3 min read

The era of voluntary sustainability reporting is ending. With the introduction of the Corporate Sustainability Reporting Directive (CSRD) by the European Union, ESG disclosure has moved from a marketing exercise to a legal obligation.

For companies in India and across the globe, CSRD Reporting represents the most significant shift in corporate transparency in decades. It doesn't just affect EU companies; it impacts any business that is part of a global value chain.

Whether you are directly in scope or being asked for data by European clients, understanding this directive is critical for business continuity in 2026.

What is the CSRD?

The CSRD is a rigorous EU legislation that requires companies to report on the impact of their activities on the environment and society, as well as the financial risks they face due to climate change.

It replaces the older Non-Financial Reporting Directive (NFRD) and significantly expands the scope. It is estimated that over 50,000 companies are now required to submit mandatory reports—up from just 11,000 under the old rules.

Unlike previous frameworks where you could "pick and choose" positive stories, CSRD Reporting demands hard data, standardized metrics, and third-party assurance (auditing).

The Core Concept: Double Materiality

The heart of the CSRD is a concept called Double Materiality. This is what sets it apart from other frameworks. To be compliant, you must assess and report on two dimensions:

Impact Materiality (Inside-Out): How your company impacts people and the planet (e.g., your carbon emissions, water pollution, labor practices).
Financial Materiality (Outside-In): How sustainability issues impact your company’s financial health (e.g., how rising sea levels or new carbon taxes threaten your bottom line).

You cannot ignore one side of the coin. If a topic is material in either dimension, it must be reported.

The ESRS: The Rules of the Game

CSRD Reporting is governed by the European Sustainability Reporting Standards (ESRS). These are mandatory standards that dictate exactly what and how you report.

They cover a wide range of topics:

E (Environmental): Climate change, pollution, water, biodiversity, and circular economy.
S (Social): Own workforce, workers in the value chain, affected communities, and consumers.
G (Governance): Business conduct and risk management.

Does This Apply to Indian Companies?

This is the most common question. The answer is: Yes, likely.

Direct Impact: Large non-EU companies with significant turnover in the EU are directly subject to the rules.
The "Trickle-Down" Effect: If you supply goods to a large European company (e.g., BMW, Siemens, IKEA), they must report on their Scope 3 emissions (supply chain). This means they will legally require CSRD-compliant data from you. If you cannot provide it, they may switch to a supplier who can.

Timeline and Roadmap

The rollout is phased, but the pressure is already here.

2025 (Reporting on 2024 data): Companies previously under NFRD.
2026 (Reporting on 2025 data): Large companies meeting specific revenue/employee criteria.
2027 (Reporting on 2026 data): Listed SMEs.

Waiting until the deadline is dangerous. Establishing the data collection systems for CSRD Reporting takes 12–18 months.

How to Prepare Your Business for CSRD Reporting

Compliance is complex, but manageable with the right approach:

Gap Analysis: Compare your current data against the mandatory ESRS requirements.
Tech Integration: Spreadsheets won't cut it. You need robust data management systems to track real-time metrics.
Audit Readiness: Remember, your report will be audited. Every claim needs evidence.

Navigate the Regulation with Confidence

CSRD Reporting is not just about compliance; it's about securing your place in the global market. Don't let new regulations disrupt your exports or partnerships.

C² specializes in navigating these complex regulatory landscapes. We help you conduct your Double Materiality assessment, gather the right data, and produce reports that satisfy even the strictest EU auditors.

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