Comprendre facilement la CSRD et ses 12 ESRS (Part 1)

Key purpose and implications

• The CSRD (Corporate Sustainability Reporting Directive) creates a harmonized, detailed EU methodology and format for non-financial (sustainability/CSR) reporting.
• Objectives:
  • Improve comparability of CSR data across companies and sectors.
  • Strengthen investor oversight and civil-society monitoring.
  • Make “genuinely committed” companies identifiable and push sustainability requirements down the value chain (suppliers/partners).
• Reporting requirements:
  • Year-on-year CSR performance with numerical, comparable data.
  • Digital availability with metadata/keywords to enable automated comparison and quick identification of sustainable measures.

Core principles and frameworks

• Double materiality: assess both financial materiality (how sustainability affects the company) and impact materiality (how the company affects environment and society).
• Value-chain approach: reporting must cover upstream and downstream impacts across the full value chain.
• ESRS (European Sustainability Reporting Standards): 12 standards define required topics, structure and metrics.
• Mandatory cross-cutting standards:
  • ESRS 1 — general principles.
  • ESRS 2 — strategy, governance, materiality.
• Non-applicability justification: if an ESRS does not apply, companies must document and justify why.
• Digital tagging and metadata: standardized digital format for public access and automated processing.
• Independent assurance: external auditors validate reports; auditors will be required to receive minimum CSR training.

The 12 ESRS (playbook for report content)

• Cross-cutting (mandatory for all):
  • ESRS 1 — general principles
  • ESRS 2 — strategy, governance, materiality
• Environmental (E):
  • ESRS E1 — climate change (carbon footprint)
  • ESRS E2 — pollution
  • ESRS E3 — water & marine resources
  • ESRS E4 — biodiversity & ecosystems
  • ESRS E5 — resource use & circular economy
• Social (S):
  • ESRS S1 — organisation’s employees
  • ESRS S2 — value-chain contributors (suppliers/contractors)
  • ESRS S3 — affected communities
  • ESRS S4 — customers, consumers, end users
• Governance / Business practices:
  • ESRS G1 — governance principles and business practices

Note: ESRS map to ISO 26000 SEP pillars. Sectoral ESRS for high-impact activities (e.g., fossil fuel exploration/extraction) will be added progressively.

Key operational and management requirements

• Reporting format:
  • Standardised structure, explicit writing style, avoid redundancy.
  • Separate accounting elements clearly to improve readability and comparability.
• Governance disclosures:
  • Must disclose CSR governance details, including the level of the CSR role (e.g., intern vs Executive Committee member) and the CSR budget.
• Auditors / assurance:
  • Auditors validating CSRD reports must undergo significant CSR training (minimum 90 hours noted).
• Supply chain effects:
  • Compliance or deficiencies will cascade to suppliers and partners, affecting procurement and supplier management.
• Market and civil-society oversight:
  • Harmonised data enables investors and NGOs to compare claims and increase scrutiny (raises greenwashing risk).

Phased rollout, affected population, timelines and thresholds

• Adoption and rollout:
  • CSRD text adopted at EU level end of July 2023; transposed into French law by ordinance (date unspecified in subtitles).
  • Phased implementation to reduce operational burden, with a goal to reach as many companies as possible by 2028 (directly or via trickle-down).
• Cohorts and dates (from subtitles):
  • Group 1: certain large listed companies subject from 1 Jan 2024 — first reports published in 2025.
    • Subtitle criteria for “large listed companies”: listed on an EU regulated market; >500 employees; balance sheet >€25M; turnover >€50M. (See note below.)
  • Subsidiaries abroad that report to a parent company in France: subject from 1 Jan 2025, publication in 2026.
  • Next cohort: “all large companies” subject from a later date if they exceed two of three thresholds: 250 employees, €25M balance sheet, turnover >€50M.
  • Consolidated thresholds for groups (per subtitles): balance sheet €30M and turnover €60M.
• Scale:
  • Estimated ~50,000 companies in Europe and ~7,600 in France affected (figures from subtitles).
• KPI for auditor training:
  • Minimum 90 hours of CSR training required for auditors validating reports.

Note: Subtitle text contained inconsistencies on thresholds and dates. Verify official legislative texts or regulator guidance for final criteria and timelines.

Concrete impacts and actionable recommendations

Concrete impacts:

• Requiring disclosure of CSR staffing level and budget will force companies to operationalise CSR (assign senior roles and dedicated budgets).
• Standardised format and digital metadata enable benchmarking — companies can use verified data for differentiation.
• Sector-specific ESRS coming later will add disclosure obligations for high-impact sectors.

Actionable recommendations:

1. Early gap analysis:
   • Map current disclosures to ESRS 1 & 2 and the 12 topic standards.
   • Document relevance or non-relevance of each ESRS, with justifications.
2. Assign governance and budget:
   • Appoint senior CSR ownership and set a defined CSR budget.
   • Include CSR metrics in board reporting.
3. Prepare data systems:
   • Implement digital tagging/metadata processes and data collection systems for year-on-year numeric comparatives.
4. Extend supplier due diligence:
   • Integrate supplier programmes to cascade CSRD requirements through the value chain.
5. Training and assurance readiness:
   • Train internal teams and coordinate with external auditors to meet assurance expectations and anticipate auditor competency requirements.
6. Monitor developments:
   • Track evolving sectoral ESRS and CSRD revisions; adopt an incremental compliance plan aligned with cohort timelines.
7. Use harmonised data strategically:
   • Communicate verifiable improvements and benchmark positions to investors and customers as a GTM/competitive angle.

Uncertainties and enforcement

• CSRD is subject to frequent revisions — continuous monitoring is required.
• Enforcement mechanisms, sanctions and practical reporting sanctions were mentioned as unclear in the source; companies should plan for reputational and regulatory risk even while sanction frameworks evolve.

Sources / presenters

• Video: “Comprendre facilement la CSRD et ses 12 ESRS (Part 1)” — presenter not named in subtitles (unnamed video host).