CSRD Assurance requirements 

The EU Corporate Sustainability Reporting Directive (CSRD) came into effect in January 2024. Disclosure will be required beginning 2025 for companies already reporting under the Non-Financial Reporting Directive (NFRD) and reporting for all other large companies begins in 2026. Small and Medium size Enterprises with at least 250 employees will also be required to disclose their sustainability performance and activities starting in 2027.

Non EU companies that operate in the EU may well fall under the CSRD regulation if; 

This new legislation means sustainability reporting for those organizations affected now has a wider scope and sharper focus on business impacts. As well as outlining a comprehensive framework and specific guidelines on what and how to report, it also states organisations will require independent assurance of their sustainability report and metrics.

Initially, from the first year of reporting CSRD disclosures, companies will need to obtain limited assurance on their report and metrics compliance. In the long run reasonable assurance will be required.

The reporting requirements of CSRD are extensive with relatively short lead times for companies to prepare, especially for companies required to report this year. Therefore, early preparation is critical to ensure you have the required data, quality and volume and the processes and systems to collect and analyse to comply with the required disclosures.

Where to start?

Key areas to start with are to assess your current material sustainability impacts, risk and opportunities in line with the CSRD’s double materiality requirements. Then, consider whether your existing processes and controls are robust enough to manage the collection of the quantitative and qualitative information you will be required to report.

Achieving assurance on your required disclosures is a journey. So starting by undertaking an assurance readiness of your current reporting processes, controls and data is a useful option for companies new to assurance or finding themselves reporting information they have never had to report on before. Undertaking an assurance readiness exercise can assist in identifying areas requiring immediate focus and requiring more resources. Assurance readiness, when conducted with the rigour of a full assurance process, effectively acts as a confidential ‘dry run’ without the risk of having to publish a qualified assurance opinion.

The next stage is to obtain limited assurance on your disclosures. Whilst the financial and sustainability information will be integrated into your annual report it’s important that the assurance of the sustainability information is undertaken by auditors with the science based, sustainability subject matter expertise to understand the information. This will ensure your disclosures are accurate and relevant, minimizing financial and reputational risk and improving business performance.

CSRD states that the limited assurance can be provided by independent assurance providers. (IASP).

Approach and methodology

ERM CVS’s assurance approach and methodology has been developed and is conducted in accordance with the most broadly accepted and used assurance standard (ISAE 3000) which is governed by the same quality control and independence criterion as financial auditing and therefore meets the current understanding of the requirements of an IASP.

We are a global team comprised of both sustainability professionals and CPAs focused solely on ESG Assurance services. This means we bring significant understanding based on our day-to-day involvement in assessing ESG disclosures, data, processes and internal controls.

Due to our experience and technical competency ERM CVS was asked to contribute to the development and revision of international assurance standards. Being at the forefront of standards means we are best placed to support clients as they develop reporting frameworks.

We’ve been working with large global clients across diverse industry sectors along their ESG reporting journey’s for over 25 years and our trusted partnerships continue to grow.

Please get in touch if you’d like to find out how we can help you on your CSRD assurance and reporting journey.