CSRD First Wave Reporting Begins: What Companies Should Expect

A New Era in European Sustainability Reporting

January 2025 marks a historic milestone in European corporate sustainability reporting. The Corporate Sustainability Reporting Directive (CSRD) has entered into force for the first wave of companies. These organizations will report their FY2024 sustainability information for the first time in accordance with the European Sustainability Reporting Standards (ESRS) (Directive 2022/2464, Article 5).

This represents a shift from the Non-Financial Reporting Directive (NFRD) to a far more comprehensive framework. The scope is expanding, requirements are becoming granular, and assurance of reported information is now mandatory.

Who Falls Under the First Wave?

CSRD's phased implementation unfolds across four waves. The first wave covers large public-interest entities (PIEs) that were already subject to the NFRD:

• EU-listed companies with more than 500 employees
• Large banks and insurance companies
• Other entities already reporting under the NFRD

This group encompasses approximately 11,700 companies. First wave companies will publish their inaugural ESRS-compliant reports in 2025, covering FY2024 data. The second wave (FY2025) will extend to other large companies with more than 250 employees (Directive 2022/2464, Article 5(2)).

ESRS: What Will Be Reported?

The European Sustainability Reporting Standards, adopted through Commission Delegated Regulation 2023/2772, comprise two cross-cutting standards and ten topical standards:

Cross-Cutting Standards

• ESRS 1: General requirements — double materiality assessment, reporting boundaries
• ESRS 2: General disclosures — governance, strategy, impact-risk-opportunity management (mandatory for all companies)

Topical Standards

• Environmental: E1 (Climate), E2 (Pollution), E3 (Water), E4 (Biodiversity), E5 (Resource Use)
• Social: S1 (Own Workforce), S2 (Value Chain Workers), S3 (Communities), S4 (Consumers)
• Governance: G1 (Business Conduct)

Application of topical standards depends on the company's double materiality assessment. However, ESRS 2 and core climate change disclosures are mandatory for all companies (Commission Delegated Regulation 2023/2772, Annex I).

Double Materiality: The Cornerstone of CSRD

CSRD's most defining feature is its double materiality approach. Companies must evaluate sustainability matters from two perspectives:

1. Impact materiality: The company's actual or potential impacts on people and the environment
2. Financial materiality: The risks and opportunities that sustainability matters create for the company's financial position, performance, and cash flows

If a topic is material from either perspective, it falls within the reporting scope. Implementation guidance published by EFRAG provides detailed direction on structuring this assessment (EFRAG IG 1, 2023).

Supply Chain Implications: A Wake-Up Call for Non-EU Companies

CSRD's reach does not stop at EU borders. First wave companies must also report on sustainability impacts across their value chains. This creates direct consequences for non-EU suppliers:

• Data requests will increase: EU buyers will request Scope 3 emissions data, human rights due diligence information, and environmental performance indicators
• Contractual requirements will change: Supply agreements will begin incorporating sustainability data-sharing clauses
• Audit scope will expand: The limited assurance requirement extends to the verifiability of supply chain data

All companies supplying to the EU market, including Turkish exporters, should prepare to meet these data demands. Proactive data readiness will become a determining factor in maintaining commercial relationships.

Assurance Requirements

CSRD mandates independent assurance of sustainability information. Limited assurance will apply initially, with a planned transition to reasonable assurance in subsequent years (Directive 2022/2464, Article 34).

This means sustainability reporting is approaching a level of reliability comparable to financial reporting. Companies need to structure their internal controls, data collection infrastructure, and documentation systems accordingly.

Critical Steps for Preparation

While first wave companies report FY2024 data, second and third wave companies should begin preparing now:

1. Complete the double materiality assessment — this determines which ESRS standards apply
2. Establish data collection processes — particularly for Scope 3 and value chain data
3. Build internal capacity — ESRS technical training and reporting software evaluation
4. Plan assurance provider selection — establish early contact with experienced audit firms

Bottom Line: CSRD first wave reporting sets a new standard in European sustainability reporting. With its scope, granularity, and assurance requirements, this framework will transform not just EU companies, but global supply chains.

See how enterprise teams streamline CSRD compliance across multiple frameworks.