Overview of the CSRD


    The CSRD is currently being transposed into Luxembourg law. A bill has been tabled, and its legislative process is currently underway. The CSRD amends the Accounting Directive, the Audit Directive, the Transparency Directive and the Audit Regulation.


    The CSRD extends the scope of the NFRD by including all companies listed on a European regulated market (with the exception of micro-companies), all large European companies, as well as certain large non-European companies with significant links to European market.

    It strengthens and standardises reporting obligations by requiring the use of ESRS to prepare sustainability reports. Indeed, the CSRD requires the disclosure of information necessary to understand the company’s impacts on sustainability matters, and how sustainability matters affect the company’s development, performance, and position.

    This shall specifically encompass a brief description of the company’s business model and strategy, including, inter alia, the resilience of its business model and strategy in relation to risks related to sustainability matters, as well as the opportunities stemming from sustainability matters and the company’s transition plan compatible with the Paris Agreement. The information should also include the sustainability targets set by the company and the timeline envisaged for achieving them, as well as update on the progress made in terms of their completion. Another key requirement is a description of the role of the administrative, management and supervisory bodies with regard to sustainability matters, and of their expertise and skills in in this field or their access to such expertise and skills.

    The company should further disclose a summary of its policies in relation to sustainability matters and the existence of incentive schemes linked to sustainability matters which are offered to members of the administrative, management and supervisory bodies. The published information should also cover the due diligence process implemented by the company on sustainability matters, including the principal actual or potential adverse impacts connected with the company’s own operations and with its value chain. Another cornerstone of the CSRD is the description of the principal sustainability risk exposures of the company and how those are managed.


    The sustainability report shall be clearly identifiable as a dedicated section of the management report.

    Digital taxonomy

    The management report must be prepared in XHTML format and the sustainability report, including the information required by Article 8 of Regulation (EU) 2020/852, shall be marked up (‘tagged’) in machine-readable XBRL format by providing XBRL elements (or ‘tags’) for every datapoint and dimensional disaggregation defined in the ESRS disclosure requirements.

    EFRAG has been tasked by the European Commission (EC) to develop the digital taxonomy for the ESRS. The final XBRL taxonomy is expected to be handed over during summer 2024 to the EC and the European Securities and Markets Authority (ESMA). ESMA will then develop related draft Regulatory Technical Standard (RTS) for tagging the sustainability statement under ESRS. Such tagging rules will finally be adopted by the EC by way of a Delegated Act (DA) amending Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF).

    Assurance report

    In Luxembourg, an approved statutory auditor [réviseur d’entreprises agréé] or an approved audit firm [cabinet de revision agréé] will be required to issue an opinion on this sustainability report on the basis of a limited assurance engagement.

    See Assurance of Sustainability Reporting.


    Laws, regulations and directives