CSRD and ESRS: The current state of affairs

January 8, 2023
Gerard Jong
Risk & Compliance Consultant

During the consultation on the new sustainability reporting standards in 2022, no less than 750 responses were received. It was therefore highly questionable whether EFRAG (European Financial Reporting Advisory Group) would submit the reporting standards to the European Commission (EC) in November 2022, as it had planned. Against all expectations, EFRAG succeeded in delivering its first set of ESRS (European Sustainability Reporting Standards) on time. What is the current state of affairs?


The final text of the CSRD was published in the Official Journal of the EU on December 16th. This EU directive will come into effect 20 days later, after which EU member states will have 18 months to implement it. Because it is a directive and not a regulation, there is no direct effect. The directive must first be implemented in national legislation.


The first set of ESRS consists of two so-called "cross-cutting standards" and ten "topical standards" (respectively E1 to E5 for the sustainability topic "Environment", S1 to S4 for "Social" and G1 for "Governance"). It is clear that the Sustainability Reporting Board (SRB) has taken seriously the many (critical) responses it has received in response to the concept ESRS. As a result, it has tried to take into account as many international reporting standards and other international instruments as possible, such as those of the International Sustainability Reporting Standards Board (ISSB) and the Global Reporting Initiative (GRI).

Furthermore, in the context of the "materiality assessment process" to be carried out by companies, the SRB has abandoned the much-criticized concept of the "rebuttable presumption". A simpler approach has been chosen, in which this process has been given a more central role at the beginning of the sustainability reporting process.

And, last but not least, the number of "Disclosure Requirements" (DRs) has been significantly reduced. From a total of 137 (!) in the concept versions to 82 now. A large number of DRs have simply been scrapped, and others may still be included in the second set of (sector-specific) ESRS that EFRAG has yet to prepare. Many DRs now also have a so-called "phase-in period", which means that compliance with the DRs included in a specific ESRS will only be required one, two or three years after its entry into force. Sustainability reporting that requires data from chain partners is not generally required in the first three years after entry into force. During this period, companies can use their own "in-house data".

Based on ESRS 1 ("General requirements"), it is clear that all companies that fall within the scope of the CSRD must:

  • Carry out a so-called materiality assessment;
  • Regardless of the outcome of that assessment, always publish certain information (including certain data points) on the basis of ESRS 2 (including Appendix C), ESRS E1 ("Climate change") and, if they have 250 or more employees, ESRS S1-1 to S1-9 ("Own workforce");
  • If that assessment shows that a sustainability topic is material, they must publish information on it in line with the relevant "topical" ESRS and may need to make additional entity-specific disclosures if the sustainability topic is not covered sufficiently by an ESRS; and
  • Continuously carry out a "sustainability due diligence process"

As part of the ten "topical" ESRS, the companies in question must publish information on their policies, actions and resources, and targets regarding the following sustainability topics:

  • Climate change
  • Pollution
  • Water and marine resources
  • Biodiversity and ecosystems
  • Resources and circular economy
  • Own workforce
  • Works in the value chain
  • Affected communities
  • Customers and end-users
  • Business conduct

How to proceed?

EFRAG has submitted its first set of ESRS as technical advice to the EC. The EC will now consult the designated EU bodies and member states on this matter. The approved ESRS will then be adopted by a so-called "delegated act" no later than 30 June 2023.

Just as with the implementation of the CSRD, a separate decision will be required for the implementation of the approved ESRS in the Netherlands. For example, the "Besluit bekendmaking diversiteitsbeleid" and the "Besluit bekendmaking niet-financiële informatie" were required for the implementation of the predecessor of the CSRD, the NFRD.

In the coming months, EFRAG will focus on the second set of (draft) ESRS, which will contain sector-specific standards. This second set of ESRS will also include separate and proportional sustainability reporting standards for listed small and medium-sized enterprises.


With the submission of the first set of ESRS, an important step has been taken in improving sustainability reporting in Europe. But we're not there yet, as there is more to come for companies in specific sectors.

Based on the ESRS submitted to the EC, it is clear that EFRAG still sets a high bar when it comes to providing sustainability information by companies. As we indicated in our earlier publication, we see two major challenges here:

  • The availability and quality of data needed for sustainability reporting; and
  • The required organisation to ensure that the company demonstrably meets all mandatory sustainability reporting requirements based on that data

What can we do for you?

The CSRD has yet to be implemented in the Netherlands, and the first set of ESRS is now with the EC as technical advice. This does not mean, of course, that you should not prepare for its entry into force. After all, a good start is half the work!

Our consultants can help you with that preparation, for example by providing insight into how your company deals with sustainability issues, what the impact of your business activities is on those issues, and how they may affect your business operations. Please feel free to contact us to discuss your advisory needs.

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