CSRD

What it means

CSRD is the EU directive on sustainability reporting. It replaced the earlier non-financial reporting rules, which left the form to the company, and turned free text into a statement prepared under the common ESRS standards and assured by an auditor.

Sustainability reporting is not marketing and not a separate document: the statement belongs inside the annual report and is filed together with the accounts. Its content is the ESG topics selected by double materiality, not everything at once.

Double materiality means a company assesses each topic from two sides: how its activities affect people and the environment, and how those topics affect it financially. A topic material from just one side is still reported, which sets CSRD apart from materiality in accounting, where only the effect on the decisions of users of the accounts counts.

How it works in practice

Who is caught follows the size criteria, and the rollout runs in waves. The Omnibus package changed both: it pushed the later waves back and raised the thresholds so far that only very large undertakings stay in scope, while listed small and medium companies dropped out, so the wave and the threshold are checked, not assumed.

Slovakia transposes it through the Accounting Act, and the report ends up in the register of financial statements. Most of the data already sits in the books: energy, fuel, waste, travel, and it is collected through analytical accounts during the year.

Even a company outside CSRD scope receives questionnaires from large customers and banks that need supply chain data for their own statements. For such a client we prepare basic figures from the books, such as energy and fuel consumption, so it can answer without a separate project and in line with what its financial statements show.

What to watch out for

The data cannot be reconstructed afterwards. A company that starts counting only after the year is closed has to buy figures from suppliers or disclose the gap, the auditor will not give assurance, and a late annual report brings a fine plus a conversation with the bank about loan conditions.

The sustainability statement is assured much like the accounts, so claims without evidence become a problem. Promises of neutrality or recycling shares the company cannot back up may lead not only to an auditor’s qualification but also to a misleading advertising case, so the reported carbon footprint has to agree with the books.