What are the new sustainability and ESG rules coming in Europe? When do they start? Does every company have to comply?

In January 2023, the EU passed the Corporate Sustainability Reporting Directive (CSRD) which compliments the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy. As part of the CSRD, the EU created the European Sustainability Reporting System (ESRS) which outlines all the criteria and relevant indicators that organisations must use to fulfil their Environmental, Social and Governance (ESG) reporting commitments, as per the CSRD.

The rules initially only apply to large organisations, but the threshold for organisational size reduces each year. In 2025, entities with more than 500 staff must report for the year 2024, and in 2026, the company size reduces to 250+ staff for the reporting year 2025. In 2026, listed companies with 10 or more staff will need to report for 2025 and we may well see SMEs needing to make their first limited reports either then or the year after.

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Get monthly newsletter with impact stories from around the World and news from SUSTAINOVA.

What are the new sustainability and ESG rules coming in Europe? When do they start? Does every company have to comply?

In January 2023, the EU passed the Corporate Sustainability Reporting Directive (CSRD) which compliments the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy. As part of the CSRD, the EU created the European Sustainability Reporting System (ESRS) which outlines all the criteria and relevant indicators that organisations must use to fulfil their Environmental, Social and Governance (ESG) reporting commitments, as per the CSRD.

The rules initially only apply to large organisations, but the threshold for organisational size reduces each year. In 2025, entities with more than 500 staff must report for the year 2024, and in 2026, the company size reduces to 250+ staff for the reporting year 2025. In 2026, listed companies with 10 or more staff will need to report for 2025 and we may well see SMEs needing to make their first limited reports either then or the year after.

Subscribe to the Voice of Sustainability

Get monthly newsletter with impact stories from around the World and news from SUSTAINOVA.