The Council of the European Union adopted the Corporate Sustainability Reporting Directive (CSRD) in November 2022 in support of the European Green Deal (Green Deal) — a package of initiatives to cut greenhouse gas (GHG) emissions, direct investment toward sustainability, invest in research and innovation, and preserve Europe's natural environment. By enabling investors to better evaluate risks and investment impacts pertaining to sustainability, the CSRD is expected to mobilize private finance in support of the Green Deal. Overall, the CSRD aims to hold companies more accountable for their environmental and social impacts and to accelerate the E.U.’s transition to a fully sustainable and inclusive economic and financial system.

While the CSRD is a European directive, the CSRD requirements also apply to many non-E.U. companies with activities in the European Union. The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.

The CSRD also requires assurance on the sustainability information that companies report and will provide for the digital taxonomy of sustainability information.