From NFRD to CSRD: a fundamental shift
The Non-Financial Reporting Directive (NFRD) was the EU’s first attempt at mandatory sustainability reporting. Introduced in 2014, it required approximately 11,700 large public-interest entities to disclose non-financial information.
The CSRD replaces the NFRD with a dramatically expanded and standardised framework. Here’s what changed , and why it matters.
Key differences at a glance
| Aspect | NFRD | CSRD |
|---|---|---|
| Companies affected | ~11,700 | ~50,000+ |
| Reporting standards | Flexible (GRI, own framework) | Mandatory ESRS |
| Assurance | Not required | Limited assurance required |
| Digital format | Not required | XBRL tagging mandatory |
| Materiality approach | Single materiality | Double materiality |
| Value chain | Limited scope | Full value chain required |
| Location in annual report | Separate section possible | Integrated in management report |
Expanded scope
The most obvious change is the number of companies affected. The CSRD extends reporting obligations to:
- All large EU companies (not just public-interest entities)
- Listed SMEs (with a transition period)
- Non-EU companies with significant EU revenue
This means many companies that never had to report sustainability data will need to start from scratch.
Standardised reporting with ESRS
Under the NFRD, companies could choose their own reporting framework or follow GRI guidelines. This made comparison between companies nearly impossible.
The CSRD mandates the use of ESRS , a single set of standards with specific datapoints, definitions, and disclosure requirements. This standardisation is one of the directive’s greatest strengths: investors, regulators, and stakeholders can finally compare sustainability performance across companies.
Mandatory assurance
NFRD reports were rarely assured. Under the CSRD, all reports require at least limited assurance from an independent auditor from day one, with the EU considering a move to reasonable assurance in the future.
This means your data must be auditable , with clear evidence trails, consistent methodologies, and documented processes.
Double materiality
Perhaps the most conceptually significant change: the move from single to double materiality. Companies must now assess both how they affect the world and how the world affects them.
This bidirectional assessment ensures that reports capture the full picture , not just financial risk, but real-world impact.
What this means for you
If you reported under NFRD, your existing processes need significant upgrades:
- More data: ESRS requires far more datapoints than most NFRD reports covered
- Better quality: Assurance requirements mean your data must be auditable
- New format: You’ll need to submit in XBRL, which requires digital tagging
- Broader scope: Value chain data (Scope 3 emissions, supplier practices) is now mandatory
If you’re reporting for the first time, the good news is you can start with modern tools and processes from day one.
Moving from NFRD to CSRD? Request a demo to see how Dcycle helps you bridge the gap.
