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The EU's commitment to promoting responsible and sustainable business practices is reflected in its corporate reporting regulations, focusing on non-financial reporting and sustainability reporting, which applies to all companies of a certain size. Insurers are considered as playing a key role in the transition towards a fully sustainable economic and financial system in line with the Green Deal, and are specifically referred to in Article 1 (3)(a) of the CSRD.

The Non-Financial Reporting Directive (Directive 2014/95/EU or "NFRD"), which amended the Accounting Directive (Directive 2013/34/EU), was introduced in 2014 with the primary objective of enhancing transparency regarding the social and environmental data provided by companies across EU Member States. Its aim was to bolster the disclosure of non-financial information, particularly among larger corporations. Notably, the NFRD did not prescribe the use of specific non-financial reporting standards or frameworks, nor did it impose detailed disclosure requirements, granting companies considerable flexibility in how they carried out their reporting.

In a significant development, the European Commission, in its Communication on the Green Deal dated December 11, 2019, committed to revisiting the NFRD in 2020 as part of its strategy to fortify the foundation for sustainable investment. Over the years, it became increasingly evident that the scope and quality of nonfinancial reporting needed to be increased to address pressing global challenges such as climate change, social inequality, and environmental degradation. In response to these imperatives, the Corporate Sustainability Reporting Directive (CSRD) is a key step forward.

It aims to establish a standardized framework for reporting environmental, social and governance data, thereby ensuring greater transparency and comparability across the European Union. This transition underscores the growing importance of sustainability in the corporate landscape and reflects the EU's firm commitment to promoting responsible and sustainable business practices.

Framework legislation

Directive (EU) 2022/2464 Corporate Sustainability Reporting

On 21 April 2021, the European Commission adopted a package of measures, which included a proposal for a Corporate Sustainability Reporting Directive which aims to revise and strengthen the existing rules introduced by the Non-Financial Reporting Directive (NFRD), and to bring - over time - sustainability reporting on a par with financial reporting. 

The Corporate Sustainability Reporting Directive, ie Directive (EU) 2022/2464, was published on 16 December 2022 and entered into force on 5 January 2023. Member States are required to implement it within 18 months from the date of publication in the EU Official Journal.

(i) Key innovations
Compared to the NFRD, the CSRD’s main innovations are: 

  • extending the scope of application to include all large companies, whether they are listed or not as well as listed small and medium-sized enterprises (SMEs), with the exception of listed micro-enterprises; 
  • standardising sustainability reporting standards, introducing mandatory assurance; 
  • including the non-financial disclosures within the management report; and 
  • reporting format in accordance with the European Single Electronic Format regulation.

(ii) Scope of application
A broader set of large companies, as well as listed SMEs, will now be required to report on sustainability. In particular, the CSRD obligations to carry out corporate sustainability reporting will apply to:

  • large public interest-entities (such as insurance companies) with more than 500 employees;
  • large companies with more than 250 employees and a turnover of EUR 40 million;
  • to all listed companies except for micro-undertakings; and
  • non-EU companies generating a net turnover of more than EUR 150 million within the EU for two successive financial years, as well as non-EU companies with a subsidiary that qualifies as a listed SME and/or branch with a net turnover of more than EUR 40 million for the previous financial year.

(iii) Timeframe
The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025. The rules set by the CSRD will start applying between 2024 and 2028, as follows:

  • from 1 January 2024 for large public-interest companies (with over 500 employees) already subject to the NFRD, with reports due in 2025;
  • from 1 January 2025 for large companies (with more than 250 employees and/or €40 million in turnover and/or €20 million in total assets) not presently subject to the NFRD, with reports due in 2026;
  • from 1 January 2026 for listed SMEs and other undertakings, with reports due in 2027. SMEs can opt-out until 2028.

Implementing measures

New reporting standards - European Sustainability Reporting Standards (ESRS)

The CSRD outlines the obligation for companies to use standards to fulfil their legal sustainability reporting obligations. That is why, on July 31, 2023, the Commission adopted the European Sustainability Reporting Standards (ESRS) which are common standards which will help companies to communicate and manage their sustainability performance more efficiently and therefore to have better access to sustainable finance. 

By requiring the use of common standards, the Accounting Directive (2013/34/EU), as amended by the CSRD, aims to ensure that companies across the EU report comparable and reliable sustainability information. 

The ESRS are based on a technical advice (ie, a set of draft standards) issued by EFRAG (European Financial Reporting Advisory Group) on November 2022, developed with the close involvement of investors, companies, auditors, civil society, trade unions, academics and national standard-setters.

The information to be disclosed is set out in the Annexes of the Delegated Act and includes information related to short-, medium- and long-term time horizons, as applicable, and contains:

(i) a brief description of the undertaking’s business model and strategy;
(ii) a description of the time-bound targets related to sustainability matters set by the undertaking; 
(iii) a description of the role of the administrative, management and supervisory bodies with regard to sustainability matters, and relevant expertise and skills or access to them; 
(iv) a description of the undertaking’s policies in relation to sustainability matters; 
(v) information about the existence of incentive schemes linked to sustainability matters; 
(vi) a description of the due diligence process implemented by the undertaking with regard to sustainability matters; 
(vii) the principal actual or potential adverse impacts connected with the undertaking’s own operations and with its value chain; 
(viii) any actions taken by the undertaking in relation to actual or potential adverse impacts, and the result of such actions; 
(ix) a description of the principal risks to the undertaking related to sustainability matters; 
(x) indicators relevant to the required disclosures.

Where applicable, the disclosures shall contain information about the undertaking’s own operations and about its value chain, including its products and services, its business relationships and its supply chain.

The European Commission has made available practical Questions and Answers on the Adoption of European Sustainability Reporting Standards on its website.

Supervisory convergence and harmonization

The purpose of the ESRS mandating large and listed companies (except micro-enterprises) to disclose information on social and environmental issues, is to enable stakeholders to assess companies' sustainability performance, in alignment with the European Green Deal.

Existing sustainability reporting has been deemed insufficient, often lacking key information. Comparisons between companies are difficult, and trust in reported information is a concern.

The ESRS Framework is designed to enhance the communication and management of sustainability performance for companies. The standards are mandatory for companies obligated by the Accounting Directive (EU Accounting Directive 2013/34/EU) to report specific sustainability information.

(i) Materiality and Reporting Requirements:

The ESRS adopt a "double materiality" perspective, requiring companies to report on both – their impacts on people/environment and how social and environmental issues create financial risks and opportunities for the company. Disclosure requirements subject to materiality are not voluntary. The information in question must be disclosed if it is material, and the undertaking's materiality assessment process is subject to external assurance in accordance with the provisions of the Accounting Directive. 

There are 12 ESRS covering various sustainability aspects, including two ‘general’ or ‘cross-cutting’ standards, five standards on environmental, four standards on social and one on governance issues. Sector-specific standards are yet to be published by the European Commission but are expected to set out specific disclosures companies operating in specified sectors may be required to make in respect of material sustainability matters.

(ii) Timeline for Reporting:

The Council and the European Parliament reached a provisional deal on the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings amending the Corporate Sustainability Reporting Directive (CSRD), namely two years later than the originally scheduled. The proposed delay is intended to give more time for companies to prepare for the sectorial European Sustainability Reporting Standards (ESRS) and for specific standards for large non-EU companies,

EU legislation mandates that publicly listed companies disclose information concerning the risks and opportunities associated with social and environmental factors. This requirement aims to aid investors, civil society, consumers, and other stakeholders in assessing the ecological and social sustainability of their operations. On July 31, 2023, the Commission introduced comprehensive cross-cutting standards to streamline this reporting process, with sector-specific standards, SME standards, and standards for third-country firms with an EU turnover of €150 million and at least one EU subsidiary or branch to follow suit. These new standards were initially slated for implementation by 30 June 2024.

However, a directive agreed upon by the co-legislators today extends the deadline for adopting these new standards to June 30, 2026. This extension is intended to allow companies to concentrate on implementing the initial set of ESRS and to afford more time for the development of sector-specific sustainability standards and those tailored for specific third-country entities. The application deadline for third-country companies will remain aligned with the financial year 2028, as outlined in the CSRD.

(iii) Guidance and Compliance:

EFRAG has provided technical advice, and the Commission made modifications to ensure proportionality.

Companies can expect additional non-binding technical guidance from EFRAG on materiality assessment and reporting on value chains. 

As regards other pieces of EU legislation, ESRS contain a series of clearly identified datapoints that correspond to specific information that financial market participants, benchmark administrators and financial institutions need for their own reporting purposes respectively under the Sustainable Finance Disclosure Regulation (SFDR), the Benchmark Regulation (BMR) or the “pillar 3” disclosure requirements under the Capital Requirements Regulation (CRR), in order to facilitate the compliance of financial market participants, benchmarks administrators and financial institutions with their own disclosure obligations respectively under the SFDR, the BMR and the CRR. Further, there is alignment with the standards of the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI).

Listed SMEs will face a proportionate reporting regime, with some exemptions, and are not required to report sustainability information until financial year 2026, with the possibility of an additional two-year opt-out after that. They may choose to adhere to the current ESRS or to meet the proportionate standards to be adopted by the Commission by end June 2024.

National implementation

European texts: Directive (EU) 2022/2464 on Corporate Sustainability Reporting

Belgium has not yet implemented the Directive on Corporate Sustainability Reporting (CSRD).

Contacts: Pierre Berger / Alexander Hamels 

European texts: Directive (EU) 2022/2464 on Corporate Sustainability Reporting

The French implementation of the Directive on Corporate Sustainability Reporting (CSRD) has not been enacted yet. However, this transposition should not be delayed much longer because the French government has until 9 December 2023 to make these orders public.

Contacts: Luc Bigel / Hamza Akli

European texts: Directive (EU) 2022/2464 on Corporate Sustainability Reporting

The CSRD replaces the Non-Financial Reporting Directive (NFRD), which had been implemented in Germany in the form of the CSR Directive Implementation Act in 2017. Accordingly, the companies concerned had to disclose in their management report or a separate sustainability report non-financial information on the following topics, among others: Environmental, social and employee aspects, human rights, combating corruption and bribery, diversity concept for the composition of the company management, the supervisory bodies and the supervisory board. All capital market-oriented companies, as well as credit institutions and insurance companies were directly affected. It was up to the companies themselves to determine the standard they will use for reporting.

This reporting obligation is now to be extended considerably under the CSRD. In future, companies will have to report more comprehensively and according to more standardised standards. The CSRD enshrines what is known as dual materiality. According to this, companies are obliged to report both on the impact of their own business operations on people and the environment and on the impact of sustainability aspects on the company. Sustainability reporting, like financial reporting, will have to be audited externally.

Gunne Bähr / Volker Lemmer / Hauke Tammert

European texts: Directive (EU) 2022/2464 on Corporate Sustainability Reporting

  • The Irish implementation of the Directive on Corporate Sustainability Reporting (CSRD) has not been enacted yet.
  • The transposition of CSRD is expected by mid-2024.

Contacts: Naoise Harnett / Lindi Raath | DLA Piper

European texts: Directive (EU) 2022/2464 on Corporate Sustainability Reporting

The Italian implementation of the Directive on Corporate Sustainability Reporting (CSRD) has not been enacted yet. The Italian government (as the other Member States) has until June 2024 to implement CSRD.

Contacts: David Marino / Valentina Grande

The Dutch implementation of the Directive on Corporate Sustainability Reporting (CSRD) has not been enacted yet.


Ahead of the introduction of CSRD, the AFM conducted an exploratory study on companies’ climate reporting and the related assurance provided by audit firms and listed companies. The study indicated that much work is needed to ensure compliant reporting as of 2024. However, the AFM also found examples of good practices. The AFM has also set up a website with further guidance on the requirements arising from the CSRD and what the AFM expects from market participants.

Contact:  Paul Hopman | DLA Piper Aline Kiers | DLA Piper

European texts: Directive (EU) 2022/2464 on Corporate Sustainability Reporting

The Norwegian implementation of the CSRD is in process. However, the Directive is yet to be incorporated in the EEA-Agreement. The Norwegian Ministry of Finance completed a public consultation on the national implementation of CSRD in September 2023, and is expected to present a bill to Parliament soon.


The Ministry has expressed a wish to follow the EU’s plan for implementation of the Regulation, which would mean that the Regulation would apply for Norwegian entities at the same time as in the rest of the EU and follow the same transitional periods.


In the annual “Financial Market Report” for 2023 (Nor, “Finansmarkedsmeldingen”) published by the Norwegian Ministry of Finance, the Ministry states that the Government expects Norwegian companies to include information in their periodic reporting on how they are affected by and manage climate and environmental risks, and how their activities affect the climate and environment.

Contacts: Hugo-A. B. Munthe-Kaas, Head of Compliance | DLA Piper / Marthe Oldernes, Associate | DLA Piper

The CSRD was adopted after Brexit and therefore does not apply in the UK. However, certain UK firms will be subject to sustainability-related disclosure requirements under either the UK Companies Act 2006 (CA’06) as amended by the Climate-related Financial Disclosure Regulations 2022, or the UK listing rules, or both.  

Section 414(CB) CA’06 now requires (amongst others) traded companies, authorised insurance companies, and firms carrying on regulated activity in Lloyd’s, to include a non-financial and sustainability information statement in their strategic report, with information on the “company’s development, performance and position and the impact of its activity, relating to, as a minimum

  1. environmental matters (including the impact of the company’s business on the environment),
  2. the company’s employees,
  3. social matters,
  4. respect for human rights, 
  5. anti-corruption and anti-bribery matters.”

Disclosures are only required when material, ie “to the extent necessary for an understanding of the company’s development, performance and position and the impact of its activity”.

Section 414CB(2A) CA’06 requires “a description of the actual and potential impacts of the principal climate-related risks and opportunities on the company’s business model and strategy; and an analysis of the resilience of the company’s business model and strategy, taking into consideration different climate-related scenarios.”

Notably, the UK regime provides for an opt-out under section 414CB (4) and (4A) CA’06.  Where the directors of a company reasonably believe that, having regard to the nature of the company’s business, and the manner in which it is carried on, the whole or a part of the climate-related financial disclosure otherwise required by section 414CB(2A) is not necessary for an understanding of the company’s business, they can omit the whole or part of the disclosure, but must provide a clear and reasoned explanation of their reasonable belief.

Under the UK listing Rules, premium listed companies have to report against the eleven disclosure recommendations by the Taskforce on Climate-related Financial Disclosure (TCFD) or explain why they have not done so. 

Contacts: George Mortimer /  Matthew Hunter | DLA Piper

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