CSRD: From Regulatory Constraint to Strategic Lever for Companies

Faced with climate urgency and growing social challenges, Europe has decided to step up. The CSRD is not just a new administrative obligation: it's a complete paradigm shift in how organizations account for their impact on society and the environment. More than 50,000 European companies are affected by this major transformation of extra-financial reporting.

A Major Turning Point in European Regulation

Adopted in late 2022 and effective January 2024, the Corporate Sustainability Reporting Directive (CSRD) redefines extra-financial reporting in Europe. It requires unprecedented transparency on environmental, social and governance (ESG) impacts, with a level of requirement comparable to traditional financial reporting.

Concretely, sustainability becomes measurable, comparable and auditable: the European Union requires standardized and verifiable data, published in standard digital formats. This sustainability directive marks the end of purely declarative CSR reports.

💡 Concrete example: A company with 300 employees generating €45M in revenue will have to publish, from 2026, an extra-financial report detailing its CO2 emissions scope 1, 2 and 3, its social practices, its ethical governance... All audited by an independent third party and published in structured digital format (XBRL).

From Communication to Accountability

The CSRD moves companies from a corporate communication logic to an accountability logic. Three pillars structure this transformation:

• ▸Audited quantitative indicators: end of intention statements without substance; place for measurable and verifiable evidence.
• ▸European standards (ESRS) led by EFRAG: a common framework at EU level ensuring comparability between organizations.
• ▸Synchronized publication with financial statements, in XHTML format with XBRL markup for data interoperability.

This evolution places ESG compliance at the heart of corporate strategy, on par with financial performance.

Who is Affected, and When?

The directive's deployment is progressive between 2024 and 2028, depending on company size and status:

⚠️ Note: Non-listed SMEs are not directly targeted but will be indirectly impacted through their clients' requirements. Large groups subject to CSRD will systematically request ESG information from their suppliers and subcontractors to complete their own reporting.

Key Obligations and ESRS Standards

Double Materiality Assessment

The cornerstone of CSRD: measuring both the company's impact on its environment (inside-out perspective) and the environment's impact on the company (outside-in perspective). This analysis determines which ESG issues are material for the organization.

ESRS Standards (EFRAG)

Mandatory application of European Sustainability Reporting Standards covering: climate and mitigation, natural resources, biodiversity and ecosystems, human capital, human rights in the value chain, governance and business ethics, consumers and end users.

External Audit and Assurance

The sustainability report must be verified by an independent third party (auditor or accredited body), with an assurance level expected to gradually increase towards reasonable assurance (comparable to financial audit).

Structured Digital Publication

Mandatory distribution in XHTML + XBRL markup format to ensure comparability, automated exploitability and transparency at European level. No more unstructured PDF appendices.

Risks of Non-Compliance

Non-compliance with the CSRD directive exposes companies to several types of cumulative risks:

• ▸Administrative and criminal sanctions: potentially high fines defined by national legislation. In France, the existing framework for inaccurate financial publications may apply (penalties provided by the Commercial Code).
• ▸Commercial exclusion risk: eviction from supply chains and public tenders that increasingly integrate binding ESG criteria.
• ▸Financing access difficulties: banks and investment funds now condition their loans and investments on ESG compliance and extra-financial transparency.
• ▸Reputation and brand image damage: loss of stakeholder trust (customers, investors, talent) and internal social risks (demotivation, turnover).

However, experience shows that proactive companies transform this constraint into a competitive advantage from the preparation phase, by structuring their governance and anticipating market expectations.

CSRD: A Constraint That Becomes a Lever

By approaching it as a strategic project rather than a simple compliance obligation, CSRD can generate multiple benefits:

• ▸Structure ESG governance and clarify responsibilities at all levels of the organization.
• ▸Strengthen credibility with investors, financial partners and institutional clients.
• ▸Increase employer attractiveness and talent retention, especially among younger generations sensitive to sustainability issues.
• ▸Optimize operational performance through sustainability KPI management integrated into the management dashboard.
• ▸Create a differentiating competitive advantage in European markets where ESG transparency becomes a selection criterion.
• ▸Anticipate future regulations (green taxonomy, extended duty of vigilance) by building now the foundations of a sustainable transition strategy.

Roadmap: How to Prepare Now

1. Raise awareness and train teams: acculturate leaders, managers and employees to ESRS, double materiality and sustainable transition issues.
2. Diagnose compliance gaps: conduct a flash audit to identify missing data, assess process maturity and prioritize projects.
3. Structure ESG governance: define roles and responsibilities, appoint a management sponsor, set up a dedicated steering committee.
4. Secure data collection and quality: map sources, implement consolidation tools, establish internal controls and documentary traceability.
5. Plan external assurance: select the independent third party (auditor or other), prepare documentation and expected evidence.
6. Test and iterate: perform a dry run before the official deadline to identify operational difficulties and adjust processes.

Our Recommended Training

Implementing CSRD in Your Company

Understand the regulatory framework, apply ESRS, build the action plan and anticipate external audit.

Audience: executives, CSR/sustainability managers, finance departments, management controllers, compliance managers.

Governance and Extra-Financial Reporting

Manage ESG compliance, integrate social/environmental/ethical aspects at management committee level.

Audience: COMEX, CODIR, risk managers, compliance and internal control managers.

Raising Team Awareness of Sustainable Transition

Provide essential ESG reflexes and clarify the concrete impact of CSRD on each function in the organization.

Audience: middle managers, support functions (HR, procurement, communication), operational teams.

Frequently Asked Questions on CSRD

Which companies are affected by CSRD and when?

Deployment is progressive between 2024 and 2028: large companies already subject to NFRD publish from 2025 (2024 fiscal year), large unlisted companies in 2026 (2025 fiscal year), listed SMEs in 2027 with possibility of deferral (2026 fiscal year), and non-EU groups exceeding €150M revenue in Europe in 2029 (2028 fiscal year).

What do ESRS and double materiality mean?

ESRS (European Sustainability Reporting Standards) are European sustainability reporting standards published by EFRAG. They define the information to be published. Double materiality combines the company's impact on the environment and society (inside-out perspective) and the impact of external issues on company performance (outside-in perspective).

Must CSRD reporting be audited?

Yes, mandatory. The sustainability report is subject to external assurance by an independent third party (auditor or accredited body). The assurance level will gradually increase to reach reasonable assurance comparable to that of financial statements.

How can Ascent Formation support you on CSRD?

We offer customized training covering understanding CSRD, applying ESRS, double materiality, ESG governance, data collection and control. We also facilitate practical workshops and help you build an operational roadmap to move from diagnosis to demonstrable compliance.