CSRD and ESG reporting: What you need to know for the first implementation in your company

It is not only European energy that is to become ever greener, but also its financial statements. For several years now, there has been political as well as macroeconomic debate on how the issue of sustainability can be improved. This also applies to the implementation of the CSRD. This is already mandatory for some companies to implement from 2025.

Learn what ESG and CSRD mean, which companies are affected, what content needs to be covered and how you can present consistent ESG reporting with SmartNotes in our blog post.

"Green" Europe with a new EU taxonomy

In order to shape a common "green" Europe, a first basis was created in 2020 with the EU taxonomy. This includes the following six key environmental goals:

  • climate protection,
  • adaptation to climate change,
  • Water and marine resources,
  • the circular economy,
  • Environmental pollution and
  • biodiversity and ecosystems.

Since then, further innovations have been introduced that are to be gradually implemented by companies. In April 2021, the European Commission presented a first draft for the new Corporate Sustainability Reporting Directive (CSRD). This was adopted by the EU Parliament in November 2022 and replaced the previously applicable Nonfinancial Reporting Directive (NFRD) when it came into force on 5 January 2023.

Objective of ESG reporting

ESG reporting is used for sustainability analysis and publication of non-financial aspects with a focus on the sustainable management of companies. The aim is to present the activities of the company and at the same time to disclose more transparency to investors and stakeholders. This can have a positive impact on company performance through the presentation of measurable ESG criteria. Examples of stakeholders are investors, customers, employees and society.

Overview of CSRD and ESG


The Corporate Sustainability Reporting Directive (CSRD) is the new EU directive on sustainability reporting and changes it profoundly for companies. A first draft, which was finally adopted in April 2022, has already been proposed since April 2021. The new EU taxonomy expands the Non-Financial Reporting Directive, which has been in force since 2014.

For which companies the CSRD is mandatory, see below in the article.


Environmental. Social. Governance. These three terms comprise the concept of ESG.

The ESG Report refers to the corporate data on sustainability and the mandatory disclosure of the three points mentioned. These criteria provide investors with information on the sustainable aspects of a company and give targeted insights into the company's actions.

In order to support the "European Green Deal", with the goal of being climate neutral by 2050, the transparency of companies with regard to sustainability efforts is promoted with ESG reporting.

Meaning of ESG
Fig. 1: Meaning of ESG

Which companies are affected?

  1. Large listed companies are required to disclose ESG information in accordance with CSRD guidelines
    1. more than 500 employees
    2. publicly listed
  2. Large enterprises with the following characteristics (two of the following three lists must be exceeded) are subject to reporting requirements as of 01.01.2025:
    1. 250 or more employees on an annual average
    2. have a balance sheet total of over 20 million euros
    3. a turnover of over 40 million euros
  3. All capital market-oriented small and medium-sized enterprises that (two of the following three listings must be exceeded) are subject to reporting requirements as of 01.01.2026.
    1. have more than 10 employees
    2. have generated a balance sheet total of more than 350,000 euros and
    3. have a turnover of over 700,000 euros.
  4. As of 01.01.2028, non-European companies are subject to reporting requirements if they
    1. have a net turnover of more than €150 million in the EU and have at least one subsidiary or branch there.

With the exception of capital market-oriented subsidiaries, subsidiaries are still exempt from their own reporting obligation if the reporting takes place at group level. In this case, the subsidiary must refer to the group report.

Timeline of ESG reporting
Fig. 2: Timeline of ESG reporting

Are small and medium-sized enterprises (SMEs) also affected by the CSRD?

In the first step, the new requirements only apply to capital market-oriented SMEs. They can waive the new reporting for a transitional period of two years, but in this case they would have to explain in a management report why they do not submit sustainability reporting.

In addition, it is expected that non-capital-market-oriented SMEs will be subject to certain reporting obligations in the future. This is due to the spillover effect of the general disclosure requirements on value and supply chains in the CSRD. The reason for this is that sustainability reports ask for data on suppliers etc. that are partly not subject to reporting requirements.

Implement ESG reporting with SmartNotes

Disclosure Management SmartNotes supports you in the "end-to-end" process from import to print-ready publication.

Due to our flexible data connection options, it is also possible to connect newer ESG systems in addition to the common consolidation systems.

With the end-to-end solution from AMANA and LucaNet, we cover the entire process from data collection and valuation to transmission and reporting in disclosure management. The automated data flow and integrated XBRL tagging make combined financial and ESG reporting quick and easy.

With each new data import, your tables, charts and also individual values in the body text are automatically updated. This means that your financial reports are always up to date and the data consistency of all figures is always guaranteed.

With SmartNotes, it is already possible to implement the new regulatory requirement ESEF that applies in the EU. With the integrated and certified XBRL processor, tables and texts can be tagged. A major advantage is that new taxonomies can be imported and processed directly without updating the software. This is particularly important in view of the constantly growing requirements of the CSRD. In addition, once tagging has been created, it can be carried over into the next year via the simple, integrated update function.

You want to integrate your sustainability report into your final report? With the help of the SmartNotes layout robot, it is possible to design a report that is ready for printing. If you would like to continue working with your layout agency, we can also simplify this process for both parties. Our InDesign converter makes it possible to convert documents into the InDesign format and thus to do a large percentage of preparatory work.

Workflow LucaNet and SmartNotes
Fig. 3: Workflow LucaNet and SmartNotes

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