7 Steps to Comply with the New European Directive Without Losing Your Mind
Complying with the CSRD is no longer just another item on your to-do list, it's a strategic priority for any business that wants to stay competitive.
This isn't just about ticking regulatory boxes. It's about embedding sustainability into the core of your operations, with clear data and real targets.
The CSRD transforms how sustainability reporting is approached: it moves from voluntary to mandatory, requiring companies to structure and communicate their environmental, social, and governance (ESG) impact with the same rigor as financial data.
And it affects thousands of companies, from large corporations to SMEs and even foreign firms with operations in Europe.
This change comes with concrete timelines, technical demands, and a lot to organize. But it’s not just about avoiding penalties.
It’s about standing out, building trust, and unlocking new opportunities.
In this guide, we’ll show you how to adapt to the CSRD without getting overwhelmed. Step by step, with clarity and no fluff. Let’s dive in.
What is the CSRD and Why Should You Care?
The CSRD (Corporate Sustainability Reporting Directive) is the new EU regulation redefining how companies must report their sustainability impact.
It replaces the old NFRD and expands its scope to over 50,000 companies, including listed SMEs and non-European firms with significant activity in the EU.
What does it require?
Annual reports containing detailed, verified data on ESG impacts — all within a common framework: the European Sustainability Reporting Standards (ESRS).
These standards ensure your disclosures are comparable, auditable, and meaningful for your stakeholders.The directive also introduces double materiality: you must report both how sustainability affects your business and how your business affects the environment and society.
And not just internally, your supply chain is included too.
4 Key Differences Between CSRD and the Former NFRD
CSRD goes a long way. How?
Covers many more companies
Demands higher technical detail and rigor
Requires external assurance and digital formatting (XBRL)
Includes environmental (E1–E5), social (S1–S4), and governance (G1) indicators
All this under a unified EU framework aligned with GRI, SASB, TCFD, and GHG Protocol.
Who Needs to Comply, and When?
The CSRD applies progressively between 2024 and 2028, depending on your company’s size and type. Here’s the timeline:
● From FY 2024 (report in 2025): Large companies already under NFRD, listed firms, banks, and insurers
● From 2025: Large companies meeting 2 of the following: 250+ employees, €50M+ revenue, or €25M+ in assets
● From 2026–2027: Listed SMEs and non-EU companies with significant EU revenue
Even if you're not directly affected, you may still need to provide ESG data as part of a supply chain.
7 Steps to Apply the CSRD in Practice
1. Understand What CSRD Requires
You must report clearly, in detail, and with verification on your ESG impact, following technical rules: the ESRS.The ESRS include:
Cross-cutting standards (ESRS 1 & 2): Apply to all companies
Topical standards: Cover E (environment), S (social), and G (governance) topicsESRS Structure
Cross-cutting: ESRS 1: General requirementsESRS 2: General disclosures
Environmental (E):
E1: Climate change
E2: Pollution
E3: Water & marine resources
E4: Biodiversity & ecosystems
E5: Resource use & circular economy
Social (S):
S1: Own workforce
S2: Workers in the value chain
S3: Affected communities
S4: Consumers & end users
Governance (G):
G1: Business conductThese cover over 1,100 data points.
You must know which apply to your company and how to report them clearly.
Double Materiality Principle
This is the CSRD’s foundation:
-Financial materiality: How ESG issues affect your business
-Impact materiality: How your business affects society and the environmentYou must report on both.
2. Assess Your Starting Point
Before creating reports, assess your current position.
Gap Analysis
Compare your existing practices with CSRD demands, this gives you a roadmap without guesswork.
Identify Key Stakeholders
Think clients, investors, employees, regulators, they’ll use your reports to make decisions.
3. Define Your Material Topics
Once you understand the context, it’s time to identify what really matters.
How to Prioritize
Use sector data, internal insights, and benchmarks to rank impacts and risks.
Stakeholder Engagement
Don’t guess. Ask. Validate. Involve stakeholders in the process.
4. Organize Your Data
Without quality data, your report won’t hold up.
What Metrics Do You Need?
Quantitative and qualitative data for E, S, and G. Some indicators are mandatory depending on your company size.
Solutions to Centralize and Validate Data
Ditch the spreadsheets. Use tools that automate collection, ensure quality, and consolidate your data in one place.
5. Prepare Your First Sustainability Report
With data ready, it's time to communicate it well.
Recommended Structure
Your report should follow the ESRS format and cover:
What you’re doing
Why you’re doing it
What results you’re seeing
How it’s being verified
Best Practices: Use clear, direct language. Avoid jargon. Explain your methods and back up your numbers.
6. Verify and Improve Continuously
Verification isn’t optional under CSRD.
Limited vs Reasonable Assurance
Start with limited assurance (lighter audit), but aim for reasonable assurance in future, it builds trust.
Feedback Loops
Incorporate feedback from auditors, team members, and stakeholders to improve with each cycle.
7. Digitize and Publish in EU-Compliant Format
This isn’t a paper report, or even just a PDF.
What is the EU Single Access Point (ESAP)?
Your reports must be ready for submission to the ESAP, the central repository accessible to all stakeholders.
Ensure Compatibility with XBRL
Your report must be tagged in XBRL format so systems can read and analyze it. It’s mandatory for full compliance.
Practical Tips to Avoid Overwhelm
1. Start with What You Already Have: You may be further along than you think. Inventory your current reports and processes. Compare them to CSRD needs to spot gaps.
2. Build a Cross-Functional Team: This isn’t just a sustainability project. Involve finance, legal, tech, HR, and ops from day one.
3: Automate Where Possible: Manual reporting is time-consuming and error-prone. Use software to centralize, automate, and verify your ESG data, and stay on schedule.
3 Benefits of Complying with the CSRD (Beyond Avoiding Fines)
1. Better Access to Sustainable Financing: Banks and investors increasingly favor companies with strong, verifiable ESG data. Your report becomes a financial asset.
2. Reputation and Trust: Well-crafted reports show what you’re doing right. Transparency builds trust with investors, clients, and suppliers.
3. Competitive Advantage: Getting ahead of the regulation sets you apart. You reduce risk, attract attention, and position yourself as a leader.
3 Disadvantages and Challenges to Consider
1. Initial Administrative Burden: The first reports take time and coordination. But it’s a necessary investment.
2. Lack of Systems or Data: Many companies still lack the infrastructure to measure ESG. The solution is to build scalable, auditable processes early.
3. Internal Resistance to Change: Sustainability is often viewed as “outside the business.” Shifting this mindset is essential for long-term success.
CSRD Compliance Checklist
1. Initial Assessment
✓ Are we within CSRD scope?
✓ What year do we need to comply?
✓ Gap analysis completed?
✓ Stakeholders identified?
2. Materiality Definition
✓ Double materiality assessment completed?
✓ Validated with stakeholders?
✓ Impact/risk criteria established?
✓ Process documented?
3. Data Organization
✓ ESG data gathered?
✓ Internal systems in place for traceability?
✓ Clear responsibilities assigned?
✓ Tools selected for centralization?
4. Report Preparation
✓ Structured per ESRS?
✓ Clear, concise writing?
✓ Required indicators included?
✓ XBRL-compatible file ready?
5. Verification and Improvement
✓ Limited external assurance done?
✓ Stakeholder and audit feedback incorporated?
✓ Plan for reasonable assurance in place?
✓ Continuous improvement processes established?
If you’ve checked all the boxes, great! If not, no worries. The key is to move forward with a clear plan. Every step you complete now saves headaches later.
Why Our Solution is Your Best Ally for CSRD
Automation, Traceability, and Data Validation
At Dcycle, we focus on what truly matters: automating, validating, and centralizing your ESG data so that CSRD compliance doesn’t become chaos.
Our platform connects every area of your business, integrates data from any source, and transforms it into audit-ready, report-ready information.
Yes, it also generates the report in the digital format required by the EU.Forget manual processes, everything is traceable, structured, and ready to verify.
Adaptable to Any Business Type
We’re built to adapt to any company, regardless of size or sector.
Listed? Part of a supply chain? Doesn’t matter.
We provide solutions tailored to exactly what the regulation demands.With Dcycle, you can generate usable data not only for CSRD, but also for EINF, ISO, SBTi, EU taxonomy, without duplicating effort.
Step-by-Step Expert Support
We’re not consultants. We’re a solution built for businesses like yours, looking for order, speed, and clarity to comply with CSRD.
We guide you through the entire process, from understanding what applies, to measuring and reporting.
If the regulation changes, we update with you. No fluff, no wasted time.
Frequently Asked Questions (FAQs)
