The Beginner’s Guide to Navigating CSRD Requirements 

The Corporate Sustainability Reporting Directive (CSRD) is set to be a transformative regulation in the realm of corporate sustainability and reporting. Designed to standardise and enhance the quality of sustainability reporting, CSRD builds on the Non-Financial Reporting Directive (NFRD) and introduces new requirements that will affect a wide range of businesses across Europe and beyond. For those operating in the UK built environment, understanding and complying with these requirements is crucial. This guide breaks down what CSRD entails, the key steps to compliance, and its implications for the sector.

What Are CSRD Requirements? 

CSRD is an EU directive aimed at improving corporate transparency on ESG issues. It significantly expands the scope of businesses required to report and increases the level of detail and accuracy expected in sustainability disclosures. Key features include: 

Broader Applicability: 

CSRD applies to all large companies and listed SMEs in the EU, as well as non-EU companies with significant operations in the region. 

A “large company” is defined as meeting two out of three criteria: 

• a net turnover of €40 million or more 

• total assets of €20 million or more 

•  at least 250 employees. 

Standardised Reporting: 

Companies must align their disclosures with the European Sustainability Reporting Standards (ESRS), which provide a consistent framework for reporting on ESG metrics. 

Double Materiality: 

Businesses are required to assess and report both how sustainability issues impact their operations (financial materiality) and how their activities affect people and the planet (impact materiality). 

Audit and Assurance: 

Sustainability reports will need to be independently assured, ensuring accuracy and credibility. 

The first wave of companies will need to comply from 2024, with reporting due in 2025. For UK-based firms working with or within the EU, understanding these requirements is vital. 

Key Steps to Compliance 

Navigating CSRD requirements may seem daunting, but a structured approach can help: 

Assess Applicability:

• Determine whether your business falls within the scope of CSRD. 
• UK companies not directly covered may still need to comply if they are part of an EU supply chain. 

Familiarise Yourself with ESRS: 

Understand the European Sustainability Reporting Standards and focus on areas most relevant to your operations, such as climate change, resource use, and social impacts. 

Map Out Double Materiality: 

Conduct a materiality assessment to evaluate: 

• How sustainability issues affect your business’s financial performance. 

• How your operations impact stakeholders and the environment.

Enhance Data Collection and Management: 

Ensure robust systems are in place to capture, track, and verify ESG data. 

This may involve upgrading technology, training staff, or collaborating with external consultants. 

Engage Stakeholders: 

Work closely with internal teams, suppliers, and partners to align sustainability goals and reporting practices. 

Prepare for Assurance: 

Audit your reporting processes and engage with assurance providers to meet verification requirements. 

Stay Ahead of Deadlines: 

Develop a clear roadmap for compliance, considering that CSRD’s phased implementation means reporting timelines may differ depending on your company’s size and location. 

Implications for the UK Built Environment

The UK built environment sector faces unique challenges and opportunities under CSRD. Key considerations include: 

Increased Reporting Demands: 

The built environment is a significant contributor to carbon emissions and resource consumption. 

CSRD reporting will likely spotlight these areas, requiring detailed disclosures on energy use, emissions, and supply chain sustainability. 

Alignment with UK Regulations: 

Many of CSRD’s principles align with UK initiatives such as the Task Force on Climate-Related Financial Disclosures (TCFD) and the upcoming Sustainability Disclosure Requirements (SDR). 

Companies operating in both regions can streamline efforts by aligning reporting practices. 

Supply Chain Impacts: 

UK organisations supplying EU projects or working with EU-based partners will need to ensure compliance to maintain relationships and meet contractual obligations. 

Competitive Advantage: 

Embracing CSRD offers a chance to lead on sustainability. 

Transparent reporting can build trust with clients, investors, and stakeholders, enhancing your reputation and market position. 

Closing Thoughts

CSRD represents a significant step forward in embedding sustainability into corporate reporting. For businesses in the UK built environment, it’s both a challenge and an opportunity. By understanding the requirements, taking proactive steps to comply, and recognising the broader implications, your organisation can not only meet regulatory demands but also drive positive environmental and social change.

Book a free discovery call with our sustainability reporting experts to explore how your organisation can reduce and measure its emissions