What is the CSRD and Why Has It Become So Important
Who Does It Apply To? Profile of Companies Obligated Under the CSRD
And What Does Complying With the CSRD Entail?
3 Benefits and Challenges of Getting Ahead and Not Waiting Until It’s Mandatory
Our Inside Perspective: How to Tackle the CSRD Smartly
Why Dcycle is Your ESG Ally to Comply with the CSRD (and More)
Frequently Asked Questions (FAQs)
"Companies subject to CSRD" is one of the fastest-growing search queries.
The new European directive changes the game and requires thousands of companies to report their ESG impact with clear and verifiable data.
More than 50,000 companies will be affected.
The regulation includes all listed companies (except micro-enterprises) and large ones that exceed two of the following three thresholds: 250 employees, €25 million in assets, or €50 million in revenue.
It also extends to non-European companies that generate more than €150 million in the EU and have subsidiaries in the region.
This article explains who needs to report, what the CSRD entails, and how to start preparing your company without wasting time or money.
The CSRD (Corporate Sustainability Reporting Directive) is the new European directive that requires thousands of companies to report their sustainability impact.
It is not a suggestion, it is a regulation.
Its goal is to make ESG information as rigorous and verifiable as financial data, with common and comparable standards across the European Union.
Unsure if you’re covered by the CSRD? Make compliance easy with a CSRD software built for the new scope.
The CSRD replaces the previous NFRD, which fell short. Very few companies reported, and the data was generic or incomplete.
With the new directive, transparency is no longer optional. Europe wants useful information for investors, banks, suppliers, and clients. And it wants it now.
This is not about image, it’s about business. If we don’t know how to measure our impact, we can’t manage it or compete in an increasingly demanding market.
The CSRD’s objective is clear: for companies to integrate sustainability into their strategy, operations, and financial decisions.
We’re not only talking about large groups or industrial sectors. The CSRD applies to a broad spectrum of companies, both inside and outside the EU, if they meet certain criteria.
From listed companies to large non-listed ones, including foreign companies with significant operations in Europe.
Since January 2024, companies already subject to the NFRD are required to report: mainly large listed companies, financial entities, and insurers.
They must submit their first CSRD-compliant report in 2025, covering data from the 2024 fiscal year.
Starting in 2025, all large companies that exceed certain thresholds must report, even if they are not listed.
In 2026, listed SMEs will join. They will have somewhat more flexibility, but must also report under the sustainability criteria defined by the EU.
A company is considered obligated if it meets at least two of these three criteria:
More than 250 employees.
More than €25 million in assets.
Over €50 million in annual revenue.
Also included are non-European companies that bill more than €150 million in the EU and have significant subsidiaries within the territory.
Can We Relax? Not Quite.
This is no longer a trend: it is a mandatory requirement shaping the future of the market.
Complying with the CSRD is not just about filling out a form. You need to have real, complete, and auditable data.
And yes, it must be presented with the same level of detail as financial data.
It’s not enough to say you’re doing something for the impact. Now you have to prove it with data, methodologies, and clear criteria.
The first step is to report under the European Sustainability Reporting Standards (ESRS). These are the common frameworks defined by the EU.
Companies must explain how they impact and are impacted by d, social, and governance factors.
All with measurable indicators and within sustainable finance frameworks that ensure comparability and rigor.
Here’s the tricky part. The hard part is not the final report, but gathering all ESG information, validating it, and linking it to each intended use.
We’re talking about scattered data, from many internal and external sources. Without digitization, this is unmanageable.
If you fail to comply, you may face sanctions, lost contracts, or exclusion from tenders. In addition, more and more banks and investors demand ESG data to continue working with you.
This is not a threat. It’s the reality. If you’re not up to date, you’re out of the game.
When people think about the CSRD, they usually picture the final report. That polished document with numbers, charts, and all the right language. But let’s be honest: the real challenge starts way before that.
The hard part isn’t writing the report, it’s everything that comes before it.
Gathering your ESG data. Validating it. Understanding what’s actually relevant. Structuring it in a way that’s useful. If your data is scattered, incomplete, or hidden in random Excel files, no amount of knowledge about ESRS will save you.
Because it’s not in one place. Because it’s owned by different departments that don’t talk to each other. Because you don’t know if what you have is even accurate. And sometimes, you don’t even know what you should be measuring.
This isn’t about lack of effort. It’s about lack of structure and clarity.
Let’s break it down:
Then comes the “we need the report” moment, and suddenly everyone is scrambling. Pulling files. Asking around. Stressing out. And in the end, you get a report that ticks boxes, but doesn’t help your business.
It’s not enough to say you did something. You have to prove it:
Everything needs to make sense. And everything needs to be auditable.
That means you can’t make this up at the last minute. If your process isn’t solid from day one, you’re going to struggle.
Most companies aren’t failing because of laziness. They’re failing because they’re working in the dark.
What actually helps you comply with the CSRD (and do something useful with it) is:
You can’t do that with spreadsheets and emails. You need a system that reduces the effort, not adds to it.
You already know:
That’s not just inefficient. That’s a missed opportunity.
The smart move is to treat ESG like the rest of your business: with systems.
That doesn’t mean hiring a big consulting firm to tell you what to do. It means having a digital solution that:
With a solution like Dcycle, for example, you skip the chaos. You get:
Nope. In fact, many small and mid-sized businesses are already taking steps to clean up their ESG data because:
The earlier you get your data organized, the less painful it is. And the less you rely on last-minute “fixes” when deadlines hit.
This isn’t about collecting ESG data just to say you did it. It’s about collecting the right data, data that:
That’s why the focus shouldn’t be “let’s get the CSRD report done.” It should be:
“Let’s build a system that works, for CSRD and everything else we need.”
That’s what sets leaders apart from followers.
Starting early gives you time to organize your data, adjust processes, and avoid mistakes. Those who are prepared, take the lead.
Additionally, you can use this information to improve efficiency and reduce costs, not just to report out of obligation.
Companies that already measure and manage their ESG impact make better decisions, win tenders, and enter more markets.
Falling behind means losing opportunities and visibility. And that, today, costs money.
More and more funds, banks, and insurers ask for ESG data to offer favorable conditions. Having that data ready opens doors.
Also, a company that understands and controls its ESG risks is more resilient and less vulnerable to regulatory or market changes.
The most qualified profiles want to work at companies that don’t improvise. And investors want to know where they’re putting their money.
Having your ESG information clear and organized conveys trust, leadership, and a future-oriented vision. Can we afford not to be in that picture? Hardly.
Adapting to the CSRD is not impossible, but there are obstacles that hold many companies back. It’s not just about reporting, but about having clear, connected, and structured data.
These are the three most frequent challenges we face when helping companies prepare.
Most companies don’t know where their ESG data is, or aren’t even sure if they have it.
Much of it is in Excel sheets, emails, or scattered across departments. And without visibility, compliance is not possible.
ESG is not just the responsibility of the sustainability or legal team. It involves operations, procurement, HR, finance, logistics…
When each department works in isolation, chaos is guaranteed. And the CSRD demands a cross-functional and connected approach.
Many teams are unclear about what the CSRD requires or how to structure the report.
They confuse terms, mix frameworks, and waste time trying to interpret technical documents.
How to choose the right methodology? By having a clear vision of what you’re obligated to do and which data you need.
Let’s cut to the chase: the CSRD is big. It’s complex. And for many companies, it sounds like a headache waiting to happen. But here’s the thing, you don’t need to understand every article of the directive to start preparing.
You just need to know where you stand, what information you already have, and how to organize it in a way that makes sense for your business. This isn’t about becoming ESG experts overnight. It’s about being smart, efficient, and future-ready.
Most companies are sitting on a goldmine of ESG data, they just don’t realize it. Whether it’s energy bills, supplier reports, HR diversity stats, or safety records, that data exists. The problem? It’s all over the place.
Some is in spreadsheets, some in PDFs, some only known to a single person in a specific department. So before you even think about frameworks or standards, map your data.
Ask yourself:
This gives you a clear picture of what you can already use, and what you need to start tracking.
One of the biggest mistakes we see is companies treating CSRD prep as a task for the sustainability or compliance team alone.
It’s not. CSRD reporting is cross-functional by nature. It affects, and requires input from, finance, HR, operations, procurement, logistics, and IT.
If you’re not involving all departments from day one, you’re setting yourself up for chaos later.
That doesn’t mean everyone needs to be an expert in ESRS or the taxonomy. But it does mean they need to understand:
Setting up a cross-functional working group, even a small one, is a smart way to create alignment and avoid duplication or blind spots.
We get it, the CSRD is packed with technical terms and legal language. But the goal here is not to make your reporting as complex as possible.
The goal is to provide information that’s:
So don’t chase perfection. Don’t get lost in circular debates about which GHG protocol line item applies where.
Start by identifying your material topics, the issues that are truly relevant to your industry and business model. Then focus your efforts there. If water use isn’t a material topic for your company, you’re not expected to turn it into a 10-page report.
And if you don’t have perfect data yet? That’s fine. Be transparent about where you are, and how you’re improving. Regulators and stakeholders value honesty over fluff.
We call it framework freeze: that moment when a team opens the ESRS or the EU taxonomy, sees hundreds of pages of requirements, and immediately shuts down.
Look, the technical documents are dense. But you don’t have to interpret them manually.
The smart move is to use a solution that decodes the requirements for you. Something that tells you, “based on your company size, location, and sector, these are the data points you need to report, and here’s how to structure them.”
That removes guesswork. And it lets your team focus on improving the actual data instead of trying to decode legal jargon.
We’re not saying ignore the regulation, of course you have to comply. But if that’s your only goal, you’re missing the bigger opportunity.
Getting ready for the CSRD means you’ll have:
In other words, you’ll be running a sharper, more competitive business.
So stop thinking about this as “extra work.” Start thinking about it as an upgrade to how your company operates.
The biggest myth about CSRD? That you need to launch a massive transformation project from day one. You don’t.
The best approach is to start small but smart.
Once that’s in place, scaling to meet other requirements, SBTi, ISO standards, customer RFPs, becomes much easier. The data is already flowing. The processes are already defined.
And you’re no longer reacting to new obligations, you’re ready for them.
Trying to do all of this manually is not sustainable. You’ll waste time, make errors, and burn out your team.
What you need is a solution that can:
That’s not a luxury. That’s what makes the difference between scrambling under pressure and reporting with confidence.
At Dcycle, we’re not auditors or consultants. We’re a solution for companies that need to organize, validate, and use their ESG data to comply with regulations and gain efficiency.
We’ve spent years simplifying this process for all types of companies. And we’ve seen what works and what doesn’t.
Trying to do everything manually is a waste of time. What truly makes a difference is automating data collection and connecting it to the different frameworks: CSRD, NFRD, ISOs, Science Based Targets initiative (SBTi), or whatever applies.
If your ESG data is digitized, you can respond quickly, save resources, and reduce errors.
Start by knowing what you already have: map out the ESG data you’re already managing.
Involve all departments from the beginning, don’t leave it all to sustainability.
Don’t get lost in the frameworks: use a solution that translates them and tells you what you need.
Don’t leave it for the last minute: the sooner you start, the easier it will be to scale.
The CSRD is not the end of the world, but it is a wake-up call. If we measure properly and have clear data, we can turn this obligation into a real advantage.
So you’ve collected the data, involved all the right departments, aligned with ESRS, and submitted your first CSRD report. That’s no small feat.
But here’s a reality check: this is not the end of the road. It’s the starting line.
The CSRD is designed to push companies toward long-term transparency, responsibility, and smarter decision-making. That means your ESG journey doesn’t stop once the first report is out. In fact, this is when the real value begins, if you know how to leverage it.
Many companies treat sustainability reporting as an annual obligation. Something to tick off and forget until next year.
That’s a missed opportunity.
CSRD reporting is meant to be part of an ongoing cycle, not a one-off event. It’s about collecting meaningful ESG data, making decisions based on that data, and demonstrating progress year over year.
Once you’ve gone through the process once, mapped your data, validated sources, involved stakeholders, created the structure, you’re sitting on something powerful: a system you can now use to optimize your entire business.
Think of it this way: before the CSRD, many companies were flying blind when it came to their sustainability impact. Emissions? Maybe estimated. Diversity? Maybe reported inconsistently. Supply chain risks? Often invisible.
After implementing CSRD reporting, that’s no longer the case.
You now have:
That’s not just compliance, that’s insight.
Insight that lets you make better operational decisions. Insight that identifies inefficiencies. Insight that prevents reputational or legal risks before they escalate.
In short: you’re no longer reacting, you’re steering.
The first CSRD report? Yes, it’s a challenge. There’s a learning curve. There are unknowns. There’s setup work.
But once you’ve got the structure in place, subsequent reporting becomes exponentially easier.
Why?
That means your team doesn’t have to start from scratch every year. You just update, validate, and refine. The process becomes more efficient, less stressful, and more cost-effective.
Plus, if you’re using a digital solution like Dcycle to automate data collection, most of the work is happening in real time, not in a mad dash in Q4.
This is a game-changer.
CSRD is just one of the frameworks that stakeholders care about. If you’ve organized your data for CSRD reporting, you’re already in a perfect position to use it for:
In the past, companies wasted time building multiple ESG reports from scratch, each with slightly different metrics. With the CSRD structure in place, you centralize your ESG data once and reuse it everywhere.
That’s not just smarter, it’s more scalable and far more sustainable long term.
Let’s talk market perception. Once you publish your first CSRD-aligned report, your stakeholders, investors, customers, regulators, employees, will notice.
And here’s the reality: they’re not going to accept less in the next report.
What they’ll expect:
The upside? If you do this right, you become a company that’s trusted. One that attracts capital. One that wins long-term contracts. One that people want to work for.
In today’s market, that kind of reputation isn’t optional, it’s a competitive advantage.
There’s a shift that happens in companies that take this seriously. Once the CSRD is embedded in your internal processes, it stops being “a project.” It becomes part of how the business operates.
Procurement starts thinking about emissions when choosing suppliers.
Finance integrates ESG risks into their forecasting models.
HR tracks inclusion and well-being as core KPIs.
Operations prioritize resource efficiency not just for savings, but for impact.
That’s how real transformation happens, not through reports, but through decisions.
The first CSRD report is the door. What comes after is what creates lasting value.
Markets change. Regulations evolve. Investor expectations keep rising.
If you’re waiting for clarity or a final version of the rules before acting, you’re already behind. But if you’ve already integrated CSRD into your business, you’re agile. You can adapt. You can anticipate. You can lead.
You’ve built the internal muscle to deal with new standards, audits, ratings, and requirements, without panic.
That’s what it means to future-proof your company.
Publishing your first CSRD-compliant report might feel like the end goal, but in reality, it's just the start of something much bigger. Once your ESG data is collected, organized, and reported, you’re sitting on an asset that goes far beyond compliance.
So what happens after the first submission? That’s where the smartest companies separate themselves from the rest.
The CSRD is designed as a continuous reporting framework, not a one-off requirement. Think of it as a loop: gather data → analyze → report → improve → repeat.
After your first report, you now have the infrastructure in place, internal coordination, digitized ESG data, validated sources, and that means next year’s report becomes exponentially easier. Less firefighting, fewer errors, more focus on results.
The companies that get this right don’t wait until Q4 to start scrambling. They treat ESG as an integrated part of their operations, and it shows.
Once your ESG data is centralized and clean, it can serve multiple purposes:
You’re not building a new system for every use case. You’re using one data source and multiplying its value.
That’s why starting early, and doing it properly, isn’t just a compliance move. It’s a business strategy.
Here’s where many companies still miss the mark: they see ESG data only as a reporting requirement. But this data, when used correctly, becomes a tool for smarter decision-making.
Example:
When you integrate ESG insights into financial planning, procurement, HR, and strategy, you start creating measurable business value, not just filling in reports.
Something powerful happens when ESG stops being a compliance checkbox and becomes a shared language inside your company.
Finance begins tracking carbon like it tracks costs.
Operations starts using lifecycle impact as a quality metric.
Sustainability teams work with HR and procurement, not in isolation.
Leadership gets real-time visibility into ESG risks and trends.
In short: you go from siloed reporting to integrated performance. And this shift is what makes long-term ESG leadership possible.
The CSRD isn’t just about saying where you are, it’s about proving where you’re going. After your first report, stakeholders expect progress. That means setting goals, tracking them, and adjusting course.
You don’t have to overhaul everything. Start with one area:
As you move forward, your ESG strategy becomes more real, measurable, and credible. Progress isn’t optional, it’s expected.
Let’s be blunt: the CSRD won’t be the last major ESG regulation. More is coming, more depth, more scrutiny, more granularity. And customers, investors, and talent are watching closely.
If your company already has structured ESG data and internal processes aligned to CSRD, you’re ready to absorb what’s next without panic:
No problem, you’ve already built the muscle.
The same applies to market opportunities. Companies that already have CSRD systems in place:
This is how you build a future-ready business.
There’s a myth that ESG reporting is expensive. And yes, the initial setup, if done manually, can be.
But the reality is that once your systems are in place and data is automated, the costs drop significantly:
Instead, you save time, reduce human error, and build scalable reporting cycles. And you free up your sustainability team to work on improving outcomes, not just reporting them.
Now that you have structured, verified ESG data, you can tell a better story:
Most importantly, you can share real progress. Not greenwashed headlines. Not vague commitments. Just honest, traceable impact.
This transparency builds trust, and in a competitive market, trust is one of the most valuable currencies.
At Dcycle, we’re not auditors or consultants. We’re a solution for companies that need order and clarity in everything related to their ESG data.
We take care of capturing, organizing, and connecting your information so you can comply with the CSRD without wasting time or energy.
We connect to your systems and automatically collect the relevant data. Everything is centralized, validated, and ready to use.
No more chasing Excel files or asking each department for data. Everything is in one place and up to date.
Once your data is organized, you can use it for all your ESG use cases. Not just to comply, but to make better decisions.
Your effort is multiplied: a single system that works for everything the market and regulations demand.
Automating data collection and reporting not only reduces the margin for error, it also frees you from repetitive tasks and gives you full control over the process.
With Dcycle, you have reliable data, ready for audits and to demonstrate your impact clearly. Can we relax? Much more than before.
The CSRD has been in effect since January 2023. The first obligated companies are those that were already under the previous NFRD.
In 2025 and 2026, more groups are added, including large non-listed companies and listed SMEs.
The CSRD replaces the NFRD, expanding the number of obligated companies and requiring a much higher level of detail.
Generic statements are no longer enough: you must present verified and structured data.
The consequences can be serious: fines, loss of access to financing, exclusion from tenders, or loss of contracts. It’s not optional, it’s a legal obligation with direct impact on the business.
The ESRS (European Sustainability Reporting Standards) are the technical framework that defines how to report under the CSRD. They tell you which indicators you must present and how to structure your ESG information.
If you meet at least two of the following three criteria, you are in: more than 250 employees, more than €25 million in assets, or more than €50 million in annual revenue.
Also if you generate over €150 million in the EU and have a subsidiary here. Do you meet any of these? Then it’s time to get ready.
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Carbon footprint calculation analyzes all emissions generated throughout a product’s life cycle, including raw material extraction, production, transportation, usage, and disposal.
The most recognized methodologies are:
Digital tools like Dcycle simplify the process, providing accurate and actionable insights.
Some strategies require initial investment, but long-term benefits outweigh costs.
Investing in carbon reduction is not just an environmental action, it’s a smart business strategy.
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