The Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) are two pivotal pieces of the EU’s sustainability framework. While the CSRD mandates companies to report sustainability information, the CSDDD requires companies to trigger change in corporate behavior. Together, these directives form a complementary structure that ensures transparency, accountability, and meaningful progress towards sustainable corporate practices.
Accountancy Europe created a table that outlines key aspects of both directives to illustrate their complementary objectives. The table provides a summary of those key aspects aiming to provide stakeholders with an overview of the interplay between CSRD and CSDDD.
For more details on each directive, check our FAQs: all you need to know about the Corporate Sustainability Reporting Directive and factsheet Corporate Sustainability Due Diligence Directive – what the accountancy profession should know
The CSRD is a reporting framework aiming to enhance transparency, consistency and reliability of sustainability reporting by undertakings. It requires to disclose high-quality, standardised, comparable and reliable information for sustainable decision making. It helps undertakings identify and manage their own sustainability risks, and opportunities as well as investors and civil society actors access the information to evaluate EU companies’ performance, development, position, and impact on sustainability matters.
The CSDDD establishes a sustainable corporate behavioural framework to ensure that companies’ activities are aligned with the EU’s sustainability objectives. It mandates companies to identify and address adverse human rights and environmental impacts throughout their “chains of activities” (see below). Companies will also need to develop transition plans to ensure that their business model and strategy are aligned with the transition to a sustainable economy.
Reporting on the 2024 data
*PIEs as defined per Accounting Directive:
N/A
Reporting on the 2025 data
N/A
Reporting on the 2026 data
N.b. micro-enterprises are excluded from the scope
*Possibility to opt-out for the first two years if the SME provides a statement explaining why their management does not capture sustainability information
Companies with the following features
N.b. non-EU companies operating in the EU fall within the same scope, but with two exceptions:
N/A
Companies with the following features
N.b. non-EU companies operating in the EU fall within the same scope, but with two exceptions:
Reporting on the 2028 data
N.b. these companies are expected to report on their impacts
Companies meeting the following features
N.b. non-EU companies operating in the EU fall within the same scope, but with two exceptions:
Value chain encompasses the full range of activities, resources and relationships an undertaking uses and relies on to create its product/service, from the conception to delivery, consumption and end-of life. It includes those that related to its business model and external environment where it operates (as per ESRS).
Relevant activities, resources and relationships include those in:
Value chain includes both:
Chain of activities: activities of a company’s direct and indirect, upstream and downstream business partners which are defined as follows:
N.b. as per CSDDD, regulated financial undertakings are only subject to due diligence obligations for the upstream part of their chains of activities
The CSRD requires limited assurance over sustainability reporting as from 2025. The CSRD foresees a possibility of moving to reasonable assurance in 2028 subject to the EC’s positive assessment whether the transition is feasible for undertakings and assurance practitioners.
The CSDDD allows for voluntary independent third-party verification:
The limited assurance opinion should cover:
N.b. Shareholders with > 5% voting rights or 5% capital of the undertaking have the right to ask to involve an accredited third party to prepare a report on some elements of sustainability reporting. This accredited third party cannot belong to the same firm or network as the auditor carrying out the statutory audit.
The CSRD requires statutory auditors to obtain knowledge on specific subjects to be allowed to carry out assurance engagements of sustainability reporting:
Statutory auditors should also complete practical training to carry out assurance engagements of sustainability reporting. The CSRD includes transitional arrangements for statutory auditors who have been qualified before 1 January 2026.
The Audit Directive 2006/43/EC) requires statutory auditors to comply with the rules on professional ethics, independence, objectivity, confidentiality and professional secrecy. These rules also are extended to statutory auditors carrying out sustainability reporting assurance.
MSs, that have authorised IASPs to carry out sustainability assurance should ensure that IASPs are subject to equivalent requirements to those set out in the Audit Directive 2006/43/EC concerning assurance of sustainability reporting, incl. ethics, independence, objectivity, confidentiality and professional secrecy, training and examination, continued education.
The EC shall adopt, via delegated acts, an EU limited assurance standard by 1 October 2026.
MSs may apply national assurance standards, procedures or requirements as long as the EC has not adopted an assurance standard covering the same subject matter.
The Committee of European Auditing Oversight Bodies (CEAOB) adopted non-binding guidelines for limited assurance engagements to facilitate the harmonisation of sustainability assurance across EU MSs in the transitional period.
By 1 October 2028, the EC shall adopt an assurance standard for reasonable assurance, following an assessment to determine if the transition is feasible for undertakings and assurance practitioners. The delegated act should specify when reasonable assurance requirement would start applying.
The EC will issue guidance setting out fitness criteria and a methodology for companies to assess the fitness of third-party verifiers, and guidance for monitoring the accuracy, effectiveness and integrity of third-party verification.
The CSRD mandates companies to disclose their transition plan to ensure that their business model and strategy align with the transition to a sustainable economy and the objectives of limiting global warming to 1,5 °C as well as the objective of achieving climate neutrality by 2050.
As per the ESRS delegated act, disclosure requirement E1-1 – Transition plan for climate change mitigation, companies shall disclose their transition plan for climate change mitigation, including climate change mitigation actions. In case the undertaking does not have a transition plan in place, it shall indicate whether and, if so, when it will adopt a transition plan.
While the CSRD requires companies to disclose information related to their transition plans, it does not mandate them to set one up.
The CSDDD mandates that undertakings establish a transition plan, update it every 12 months and include a report that describes their progress toward meeting the targets. This report should:
Companies within CSRD’s scope that report a transition plan, or those covered by their parent company’s transition plan, are deemed to be compliant with the obligation to adopt a transition plan under CSDDD Article 22. For such companies, CSDDD’s additional obligations include expectations to put the plan into effect and to update it every 12 months.
The CSRD extends the scope of reporting requirements to non-EU companies generating a net turnover > € 150 million in the EU with a subsidiary that is a large company or a listed SME or a branch exceeding 40million meeting specific criterion (under Article 40a) (see scope section above).
Those companies are required to report on their impacts on social and environmental matters; no obligation to include the EU Taxonomy Regulation Article 8 disclosures.
Non-EU companies can report sustainability information using:
MSs shall require an EU subsidiary, or an EU branch of the non-EU company to publish and make accessible the sustainability report on behalf of its parent company;
The non-EU company shall also obtain assurance over its sustainability report by an authorised entity in that third country. If the company does not obtain any assurance opinion, its EU subsidiary or EU branch must issue a statement indicating that their non-EU parent company did not provide it.
Non-EU parent company can choose to publish a consolidated sustainability statement using a full set of ESRS available to date.
Subsidiary exemption should apply when the non EU parent company established in a third country reports sustainability information in accordance with ESRS or equivalent sustainability reporting standards. As equivalence assessment of sustainability reporting standards will take place at a later stage, transitional provisions have been put in place until 2030 so that MSs shall permit EU subsidiaries to report under the European standards. The CSRD also applies to non-EU companies listed on an EU regulated market (see scope section).
As per CSDDD, third country companies within CSDDD’s scope (see above) are subject to the same requirements as EU companies. In addition to this:
The EC will establish a secured system for the exchange of information regarding the net turnover generated in the EU by third country companies without an EU branch or with branches in multiple MSs. MSs shall communicate regularly through this secured system the information they have regarding the net turnover generated by such companies. The EC will then analyse the data and notify the MS where the third country company generated most of its net turnover in the EU, indicating that the company falls under CSDDD’s scope and the oversight of that MS’ national supervisor.
The CSRD does not introduce any changes to the existing EU supervisory regime. MSs are required to have penalties in place that are effective, proportionate and dissuasive for the cases of non-compliance and to establish a national supervisory authority with powers to supervise compliance by listed companies.
This means that National Competent Authorities (NCAs) are responsible for supervision of sustainability reporting by listed companies on a regulated market in the European Economic Area (EEA).
The European Supervisory and Markets Authority (ESMA) coordinates NCAs’ supervision of sustainability reporting. As per the CSRD, ESMA issued guidelines on the supervision of sustainability reporting by NCAs to promote supervisory convergence. MSs can decide whether to extend supervision of non-listed companies to NCAs or opt for another competent body.
MSs must assign one or more national authorities to be their national supervisory authority for CSDDD’s purposes:
Supervisory authorities must posses at least the following powers:
SMEs do not fall under the CSRD scope (see scope), but they are likely to be impacted indirectly. Their larger counterparts might request information to comply with their own CSRD reporting requirements.
The CSRD mandates the EC to adopt proportionate standards for listed SMEs (LSME). It stipulates that LSME standard should establish a ‘value chain cap’ – include a reference to the level of information that companies within the CSRD scope can ask SMEs within their value chains to comply with their own requirements.
EFRAG has also developed a voluntary standard for non-listed SMEs (VSME) as tasked by the EC. VSME aims at addressing growing demands for sustainability data from business partners and lowering entry market barriers for non-listed SMEs to sustainability reporting. MSs should consider introducing measures to support small and medium-sized undertakings in applying the sustainability reporting standards.
Although SMEs are not in CSDDD’s scope, they are indirectly affected by the Directive. CSDDD mandates some measures to mitigate the impact on SMEs, for example:
