Sustainability reporting in accordance with CSRD
Do you know what CSRD, the Corporate Sustainability Reporting Directive, is and what it means for you and your company? Here, you will find an overview and tips on how you can use the Nordic Swan Ecolabel in your sustainability reporting.
The EU has set a goal for Europe to become a climate-neutral continent by 2050. To achieve this, new strategies, plans, and directives are being developed. CSRD is one of these new tools.
CSRD aims to increase transparency in the financial market and encourage companies to work more systematically to reduce their environmental impact. The directive equates sustainability reporting with financial reporting, thereby imposing stricter requirements on sustainability reporting than before.
The Nordic Swan Ecolabel, the official ecolabel of the Nordic countries, with its requirements and focus on the value chain, can provide valuable insights for companies to use in their sustainability reporting.
What is CSRD?
The Corporate Sustainability Reporting Directive (CSRD) requires companies to analyse and understand the connections between their operations and the surrounding environment, then develop strategies to reduce their environmental impact. One effective tool to facilitate this work is conducting a double materiality analysis, which examines:
- How the company impacts the climate, environment, and other factors (inside-out analysis)
- How the climate, environment, and other factors impact the company (outside-in analysis)
This analysis identifies the areas where the company’s operations have the greatest environmental impact. These areas must then be reported in detail.
Who is required to report under CSRD?
CSRD came into effect on 1 July 2024. Companies with a broken fiscal year must report in accordance with CSRD for the financial year 2024/25. For those with a calendar fiscal year, reporting applies from 1 January 2025.
- Reporting for the fiscal year 2024/25: Applies to large Swedish public-interest entities (banks, insurance companies, and listed companies) with more than 500 employees.
- Reporting for the fiscal year 2025: Applies to all large companies.
- Reporting for the fiscal year 2026: Applies to all large companies and all listed small and medium-sized enterprises (SMEs).
In the EU, CSRD initially applies to 50,000 companies. However, the requirements will also affect smaller businesses in the supply chain, as large companies will need sustainability data from their subcontractors. It is also important to note that starting in 2026, small and medium-sized listed companies will also be required to report in this way.
What is ESRS?
European Sustainability Reporting Standards (ESRS) form the most specific and detailed level of CSRD reporting. The materiality analysis identifies which of the 10 areas below are most relevant to your company and, consequently, which criteria in ESRS you need to report on.
ESRS is divided into 12 areas, with the first two being overarching standards that apply to all.
ESRS 1 – General Requirements
ESRS 2 – General Disclosures
Environment
ESRS E1 – Climate Change
ESRS E2 – Pollution
ESRS E3 – Water and Marine Resources
ESRS E4 – Biodiversity and Ecosystems
ESRS E5 – Resource Use and Circular Economy
Social
ESRS S1 – Own Workforce
ESRS S2 – Workers in the Value Chain
ESRS S3 – Affected Communities
ESRS S4 – Consumers and End-users
Governance
ESRS G1 – Responsible Business Conduct
These standards help companies identify so-called IROs – impact, risks, and opportunities. IROs reveal the company’s impacts, risks, and opportunities. Download ESRS here.
The EU is also working on developing simplified standards for small and medium-sized enterprises and for specific industries.