The terms an EU sustainability reporting team actually uses, defined in plain language by practitioners. For the full walk-through, see the EU CSRD compliance guide.
The Corporate Sustainability Reporting Directive, Directive (EU) 2022/2464, the EU law that requires companies to report on sustainability matters. It amends the Accounting Directive rather than standing alone, and places the report inside the management report.
Directive 2013/34/EU, the EU's core company-reporting law. The CSRD works by amending it, which is why CSRD sustainability reporting sits inside the normal corporate reporting cycle rather than in a separate document.
The CSRD test for what a company reports, combining impact materiality and financial materiality. A topic is reported if it is material from either perspective on its own. It does not have to be material from both.
The outward-looking side of double materiality: the company's actual and potential effects on people and the environment, across its own operations and its value chain, ranked by how severe and how likely they are.
The inward-looking side of double materiality: how sustainability matters create risks, opportunities, and dependencies that affect the company's development, performance, and position over the short, medium, and long term.
The European Sustainability Reporting Standards, the detailed rulebook a company reports against. They are set by a separate delegated act that sits on top of the CSRD, and cover environmental, social and human-rights, and governance subject matter.
The body of CSRD sustainability information a company discloses, built from the required content blocks and placed in a dedicated section of the management report.
The company report that accompanies the financial statements. Under the CSRD the sustainability statement goes inside it, in a clearly identifiable dedicated section, not as a separate voluntary publication.
The EU legal term for a company or business entity. CSRD scope categories such as large undertakings are defined by the size test in the Accounting Directive.
A company that meets the Accounting Directive size test, judged on a two-of-three basis across balance sheet total, net turnover, and average employees. The size thresholds were raised by the Omnibus package, so current figures must be verified against the live EU text.
A category that includes listed companies, banks, and insurers, which receive heightened EU reporting attention. The largest such entities were brought into CSRD reporting first under the original waves.
A small or medium-sized enterprise whose securities trade on an EU regulated market, other than a micro company. It reports against a lighter, proportionate version of the ESRS and could use a transitional opt-out under the original regime.
A company based outside the EU that generates significant net turnover in the Union and operates through an EU subsidiary or branch. The EU subsidiary or branch publishes the required report.
The full set of a company's activities, products, services, and business relationships, including its supply chain. The CSRD requires impacts and risks to be assessed across the whole value chain, which reaches well beyond the company's own operations.
The most significant actual and potential negative effects a company has on people and the environment, across its own operations and value chain. Identifying and addressing them is part of the due-diligence content block.
The process a company uses to identify, prevent, reduce, remedy, or end its adverse sustainability impacts. The CSRD requires the company to disclose the process and the actions taken.
The plan describing how a company will align its business model with limiting global warming to 1.5 degrees Celsius and reaching climate neutrality by 2050. It is part of the business model and strategy content block.
Time-bound greenhouse gas reduction targets a company discloses, including, where appropriate, absolute reduction targets for at least 2030 and 2050, with progress and whether they are science-based.
The starting level of independent scrutiny the CSRD requires on sustainability reporting. It is a lower level of scrutiny than the reasonable assurance applied to audited financial statements.
The higher level of assurance the CSRD framework is designed to move toward over time, once the European Commission assesses it is feasible and sets the date for the step-up from limited assurance.
The requirement to prepare the report in a single electronic reporting format, the Inline XBRL format used for financial reporting, and to tag the sustainability information so each disclosed item is machine-readable. The assurance opinion covers the tagging.
The EU classification system for environmentally sustainable economic activities, set by a separate Regulation. CSRD reporters mark up their Taxonomy disclosures as part of the tagged report.
The extent to which a company's activities meet the EU Taxonomy criteria for being environmentally sustainable. Aligned figures are disclosed and tagged within the CSRD report where the Taxonomy applies.
The 2025-2026 EU simplification package that changed CSRD scope and timing. The substantive Omnibus I Directive was published in the Official Journal on 26 February 2026 and entered into force on 18 March 2026, raising the size thresholds and simplifying the standards.
The Omnibus directive that came into force on 17 April 2025 and postponed CSRD application by two years, moving the second wave of large companies to financial year 2027 and listed SMEs to financial year 2028.
One of the annual phases in which the original Directive brought companies into CSRD reporting, starting with the largest listed entities. The original waves and their dates were superseded by the Omnibus changes, so the current first reporting year must be checked.
Compliance Command Center turns these concepts into a board-ready CSRD program, run by practitioners and backed by software. It scopes you against the post-Omnibus thresholds, builds the double-materiality assessment, and assembles the disclosure evidence an assurer will test.
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