Corporate Sustainability Reporting Directive (CSRD) - a changing EU regulation

_{The Corporate Sustainability Reporting Directive (“CSRD”) entered into force on 5 January 2023 which revises the 2014 Non-Financial Reporting Directive (NFRD). The goal of the new CSRD is to enables businesses increase transparency and accountability of their reporting; broaden the scope of sustainability management and reporting to include sustainability risks and opportunities; and encourages businesses to develop a strategy to improve on sustainability.}

_{Approximately 50,000 companies will eventually be required to report on sustainability, including larger EU companies, as well as listed SMEs.}

_{Application to non-EU companies}

_{Non-EU companies that operate in the EU may also fall under the CSRD scope, regardless of whether they are listed or not. They shall be required to provide sustainability disclosure if:}

• _{Their net turnover generated in the EU (at the consolidated or individual level) exceeds €150 million for each of the last two consecutive financial years, and}
• _{They have at least one subsidiary in the EU (either a large EU company, or an EU company listed on an EU regulated market which is not a micro undertaking), or an EU branch with an annual net turnover exceeding €40 million in the previous financial year.}

_{Although the CSRD will be effective for eligible entities in 2024, companies are advised to begin building their internal ESG reporting mechanism during 2023 in order to be prepared for the CSRD-based disclosure in 2024.}

_{Please kindly access to this link to get the full article, our Grant Thornton experts are pleased to assist for further information.}