Procurement Glossary
Corporate Sustainability Reporting Directive (CSRD): EU sustainability reporting in Procurement
November 19, 2025
The Corporate Sustainability Reporting Directive (CSRD) is an EU directive that obliges companies to provide comprehensive sustainability reporting. It significantly expands the previous requirements and directly affects procurement through new transparency obligations along the supply chain. Find out below what the CSRD means, what implementation obligations exist and how compliance risks can be minimized.
Key Facts
- Applies gradually from 2024 for large companies with over 250 employees or 40 million euros in turnover
- Expands reporting obligations to include environmental, social and governance (ESG) aspects of the entire value chain
- Requires external audit of sustainability reports by independent auditors
- Also indirectly affects smaller suppliers due to increased data requirements from reporting companies
- Based on European Sustainability Reporting Standards (ESRS) with detailed disclosure requirements
Contents
What is the Corporate Sustainability Reporting Directive (CSRD)?
The CSRD defines new standards for sustainability reporting by European companies and replaces the previous Non-Financial Reporting Directive (NFRD).
Core elements of the CSRD
The guideline comprises three main pillars of sustainability reporting:
- Environmental aspects: Climate change, resource consumption, biodiversity and circular economy
- Social issues: workers' rights, human rights and community impact
- Governance factors: corporate management, ethics and compliance structures
CSRD vs. previous reporting obligations
Compared to the NFRD, the CSRD significantly expands the scope of application. Whereas previously only around 11,000 companies were affected, in future around 50,000 companies will be subject to the reporting obligation. The EU taxonomy will be integrated as a classification system for sustainable economic activities.
Importance of CSRD in Procurement
For purchasing organizations, CSRD means a fundamental change in supplier evaluation. Due diligence processes must be expanded to include ESG criteria, and the traceability of materials is becoming a compliance requirement.
Implementation, obligations and evidence
CSRD implementation requires systematic adjustments to reporting processes and data collection along the entire value chain.
Gradual introduction and areas of application
The directive will be introduced gradually: Large listed companies will report on the 2024 financial year from 2025, large non-listed companies will follow in 2026. Small and medium-sized listed companies have until 2027, but can apply for an extension until 2028.
Data collection and reporting obligations
Companies must collect and publish detailed information on their sustainability impacts:
- Quantitative key figures on environmental impacts such as Scope 3 emissions
- Social indicators along the supply chain
- Governance structures and risk management systems
External audit and quality assurance
All CSRD reports are subject to an external audit by qualified auditors. This compliance requirement significantly increases data quality and makes manipulated information legally problematic.
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Compliance KPIs & evidence of CSRD
Effective CSRD compliance requires measurable key figures and systematic verification to monitor reporting obligations.
Quantitative performance indicators
Central KPIs include the completeness of data collection, measured as the percentage of suppliers with complete ESG data. Data quality is assessed through error rates and validation levels. In addition, time indicators for report preparation and external audit cycles are monitored.
Verification documentation and audit trail
Complete documentation of all data sources and calculation methods is essential:
- Supplier assessments and ESG risk ratings
- Certificates and proof of compliance such as FSC-PEFC certificates
- Emissions data and product carbon footprints
Continuous improvement measurement
Progress indicators show the development of sustainability performance over time. This includes reduction rates for emissions, improvements in recycling rates and the increase in sustainable supplier partnerships.
Compliance risks and controls for CSRD
CSRD compliance entails various risks that can be minimized through systematic control mechanisms and preventive measures.
Data quality and completeness
Incomplete or inaccurate sustainability data represents the greatest compliance risk. Missing supplier data can lead to reporting gaps and legal consequences. Regular data validation and the implementation of supplier codes of conduct significantly reduce these risks.
Legal and financial consequences
Violations of CSRD requirements can lead to considerable fines and reputational damage:
- Sanctions by national supervisory authorities
- Exclusion from public tenders
- Negative valuations by investors and lenders
Supply chain transparency and loss of control
Complex, multi-level supply chains make complete data collection difficult. Whistleblower systems and regular energy audits of suppliers create the necessary transparency and enable risks to be identified at an early stage.
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Practical example
A German car manufacturer implements CSRD-compliant reporting processes for its 2,500 Tier 1 suppliers. The company is developing a digital platform for ESG data collection and linking it to existing ERP systems. Suppliers must submit quarterly data on energy consumption, emissions and social key figures. Automated plausibility checks and AI-supported anomaly detection reduce the manual validation effort by 60%. The external audit confirms data quality and compliance with ESRS standards.
- Digital ESG data platform with API integration to supplier systems
- Automated validation and anomaly detection through machine learning
- Quarterly reporting with external audit trail
Current developments and effects
CSRD implementation is driving significant changes in sustainability reporting and digital data processing.
Digitalization of sustainability reporting
Artificial intelligence is revolutionizing CSRD compliance through automated data collection and analysis. AI systems can consolidate large amounts of data from different sources and identify inconsistencies in supplier data. This significantly reduces manual effort and improves data quality for GRI Standards-compliant reports.
Effects on supplier relationships
The CSRD reinforces the trend towards long-term, strategic supplier partnerships. Companies increasingly prefer suppliers with robust ESG data and established sustainability management systems. EcoVadis ratings and similar evaluation systems are becoming increasingly important as selection criteria.
Integration into risk management systems
CSRD requirements are increasingly being integrated into existing risk management frameworks. This enables a holistic view of financial and non-financial risks and supports the development of science-based targets for decarbonization.
Conclusion
The Corporate Sustainability Reporting Directive fundamentally transforms European sustainability reporting and makes ESG transparency a legal obligation. For purchasing organizations, this means a strategic realignment of supplier evaluation and development. Successful CSRD compliance requires digital data platforms, systematic supplier integration and continuous quality assurance. Companies that invest early create competitive advantages through improved risk transparency and sustainable supply chain design.
FAQ
Which companies are affected by the CSRD?
The CSRD applies to large companies with more than 250 employees, 40 million euros in turnover or 20 million euros in total assets. Listed small and medium-sized companies are also covered, but have longer transition periods until 2028.
How does CSRD differ from other sustainability standards?
The CSRD is legally binding and requires external verification, while many other standards are voluntary. It integrates existing frameworks such as GRI standards and TCFD recommendations into a uniform European framework with detailed disclosure requirements.
What data do suppliers need to provide for CSRD compliance?
Suppliers must provide comprehensive ESG data: greenhouse gas emissions of all scopes, energy consumption, water use, waste volumes, working conditions, human rights compliance and governance structures. Data quality must be verified by certificates or external audits.
How can small suppliers fulfill CSRD requirements?
Small suppliers can take advantage of industry initiatives, use standardized ESG assessment tools and qualify through certifications. Many large buyers offer support programs and training to develop their supplier base to be CSRD compliant.
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