Interim management helps your company adapt to the CSRD directive, optimize sustainability reporting, and manage ESG requirements efficiently.
The New Normal in Corporate Reporting Practices
Are you ready to face the revolution in reporting requirements?
The EU’s new regulation, the Corporate Sustainability Reporting Directive (CSRD), brings significant changes to corporate sustainability reporting. This directive makes reporting on environmental impacts, social practices, and governance models mandatory. It is no longer enough for operations to be transparent – they must also be consistent.
Expanding Impacts
Double-check whether this also applies to your company
Although CSRD (Corporate Sustainability Reporting Directive) may seem unfamiliar to many companies, it affects nearly 50,000 companies across the EU, including SMEs that were previously not covered by the requirements. Initially, the directive applies to large companies of public interest such as listed companies, banks, and insurance companies. By 2026, however, CSRD will expand to cover smaller listed companies as well. The directive responds to the growing desire of consumers and investors to obtain information about companies’ sustainability practices by providing consistent and transparent reporting.
Key features of the CSRD directive:
- Broader coverage: While previously only large companies were subject to these requirements, now smaller companies must also adapt.
- More detailed requirements: Companies must report not only environmental information but also social and governance-related impacts.
- ESG integration: ESG reporting will be an essential part of reporting, offering companies an opportunity to improve transparency, competitiveness, and risk management. This should be seen as an opportunity, not just a requirement.
What does this mean for your company’s future?
By complying with CSRD and ESG requirements, companies can build trust, stand out from competitors, and demonstrate responsibility. A company’s future success will no longer be based solely on financial figures but also on how it manages sustainability risks and opportunities.
CSRD Directive’s Impact on Finnish Companies
Significant changes to Finnish companies’ reporting practices
A new era in corporate sustainability reporting starting in 2024, companies operating in Finland that have already reported according to the Non-Financial Reporting Directive (NFRD) will transition to the new Corporate Sustainability Reporting Directive (CSRD). This change will expand by 2025 to cover all large companies that meet defined financial criteria. By 2026, the change will also affect listed SMEs, which will be given a transition period.
The necessity of preparation
The implementation of the CSRD directive is planned to take place gradually, and it is critical that companies begin preparation measures immediately. In 2024, the directive will first come into force for those large companies that have already reported according to the NFRD (Non-Financial Reporting Directive). In 2025, the expansion will cover more large companies that have not previously been subject to reporting obligations, and in 2026, the directive will be extended to include listed SMEs. The first reports from these companies are expected in 2027. It is essential that companies are up-to-date and ready to comply with the new European Sustainability Reporting Standards (ESRS).
Important dates
- 2024: Large companies subject to NFRD start CSRD reporting.
- 2025: From 2025, the reporting obligation extends to all companies that meet two of three criteria: over 250 employees, €50 million turnover, or €25 million balance sheet.
- 2026: Listed SMEs begin reporting according to CSRD, enjoying a deadline in the transition phase.
Preparation must begin now to ensure your company is up-to-date and ready to meet all new requirements and comply with the strict ESRS standards. This is not just a statutory requirement but also an opportunity to improve your company’s sustainability profile and strengthen stakeholder confidence in the long term.
How Can Your Company Prepare for CSRD Changes?
Adapting to CSRD reporting requires quick and strategic action. Experienced interim managers are key in managing this process. Interim managers familiar with corporate responsibility issues and practices offer expertise and practical support as your company transitions to new regulatory requirements. Their experience and insight are invaluable when navigating through complex reporting requirements.
Benefits offered by interim managers
- Rapid adaptation: Interim managers focused on sustainability issues can quickly absorb the company’s operating environment and integrate CSRD requirements into the company’s reporting practices.
- In-depth expertise: Their special expertise in sustainability reporting and ESG matters brings valuable insight and know-how to your company.
- Cost-effectiveness: Interim managers provide critical expertise on a project basis without the financial burden of long-term commitments.
Concrete examples of the benefits of interim experts in sustainability issues
Interim managers can bring diverse help and improvements to your company. For example:
- Developing a sustainability strategy: Industry-savvy interim managers help create and define long-term sustainability goals that meet CSRD and ESG requirements (sustainability reporting).
- Optimizing the reporting process: They can design and implement processes that ensure the accuracy and reliability of reporting data.
- Training and coaching: They provide training and coaching for your company’s personnel, ensuring that everyone understands the principles and requirements of sustainability reporting.
- Integration of sustainability: They help incorporate the sustainability perspective into all areas of business, strengthening the company’s overall responsibility.
Sustainability-focused interim professionals offer exactly the strategic support and operational expertise that your company needs to meet CSRD requirements and anticipate market changes.
Integration of ESG Reporting into CSRD Requirements
Understand the connection between ESG reporting and CSRD
ESG reporting is an essential part of CSRD requirements, combining environmental impacts, social practices, and governance with the company’s financial reporting. This integration enables companies to communicate sustainability issues openly and transparently, which is increasingly important for both stakeholders and investors.
Changing investor expectations
Sustainability reporting attracts investments. Modern investors increasingly demand that companies adhere to ESG principles. Reporting in accordance with CSRD provides deeper information about a company’s responsibility, which can attract new investors and capital investments that value transparency and the company’s ability to manage sustainability risks.
“Investor perspective: More and more investors are looking for companies that follow ESG principles. Sustainability reporting in accordance with CSRD can attract new investors and capital investments that value corporate transparency and responsibility.”
The principle of double materiality in CSRD
Impacts on society and economic performance. The CSRD directive introduces the principle of double materiality, which obligates companies to report both on the impacts of their operations on society and the environment, and on the effects of these factors on the company’s economy. This principle requires companies to have a broader view and deeper analysis of the impacts of their operations, leading to more accurate and comprehensive reporting.
Frequently Asked Questions (FAQ)
Does the CSRD directive apply to Finnish SMEs?
Yes, from 2026 onward, listed SMEs must report on sustainability according to CSRD requirements.
What happens if a company does not meet CSRD requirements?
Failure to comply with the CSRD directive can lead to consequences such as sanctions or loss of reputation. Additionally, investors and consumers may turn to companies that report openly on sustainability issues.
Who does the CSRD apply to?
The CSRD directive applies to companies that meet at least two of the following three criteria: €50 million turnover, €25 million balance sheet, or 250 employees. The first companies will report CSRD-compliant information from the financial year 2024 onwards, but most companies will come under CSRD from the financial year 2025.
When will the CSRD enter into force?
The CSRD directive comes into force gradually between 2024-2026. The first large companies will report sustainability information from the financial year 2024 onwards, and other companies will gradually transition to reporting after this.
What is sustainability reporting?
Sustainability reporting means more detailed consideration of the social and environmental impacts of a company’s business and reporting on how these themes affect the company’s operations. Additionally, an external entity verifies the reported sustainability information.
Who does sustainability reporting apply to?
Responsibility reporting concerns large companies that are significant in terms of public interest. These include listed companies, credit institutions, and insurance companies with over 500 employees and whose turnover exceeds €40 million or balance sheet €20 million.
Is ESG reporting mandatory?
From 2024, ESG reporting is mandatory for all large listed companies according to CSRD requirements. From 2025, the reporting obligation extends to all companies that meet two of three criteria: over 250 employees, €40 million turnover, or €20 million balance sheet.
What does CSRD stand for?
CSRD stands for Corporate Sustainability Reporting Directive. It is a new EU legislation that requires large companies to publish their sustainability information as part of their management report in accordance with sustainability reporting standards.
What is double materiality analysis?
Double materiality analysis is a strategic tool used to assess both the impacts of a company’s operations on people and the environment, and the impacts of external factors on the company’s economy. This provides a comprehensive view of the company’s sustainability-related risks and opportunities.
Is sustainability reporting mandatory?
Yes, according to CSRD, sustainability reporting is mandatory for all listed and large companies from 2024 onwards. This new EU directive significantly expands previous reporting requirements.
What is CSRD in Finnish?
CSRD, or Corporate Sustainability Reporting Directive, is in Finnish “yritysten kestävyysraportointidirektiivi.” The directive came into force on January 1, 2023, and is applied from the financial year 2024 onwards. It amends the Accounting Directive 2013/34/EU.
