The Corporate Sustainability Reporting Directive (CSRD), adopted by the European Union in 2022, represents a significant evolution of the earlier Non-Financial Reporting Directive (NFRD, 2014/95/EU). It was designed to respond to the growing need for reliable, comparable, and comprehensive sustainability data across industries. While Corporate Social Responsibility (CSR) is based on voluntary ethical commitment, CSRD establishes a legal obligation for companies to report on their sustainability performance, thus transforming sustainability from a reputational choice into a governance standard. The directive forms part of the EU’s broader agenda for sustainable finance and the European Green Deal, aligning corporate disclosure with the EU’s climate and social objectives. It introduces a unified reporting framework based on the European Sustainability Reporting Standards (ESRS), developed by EFRAG (European Financial Reporting Advisory Group).

CSRD requires companies to disclose non-financial information with the same rigor and reliability as financial reporting.
The directive applies to:

• All large EU companies (exceeding 250 employees, €40 million turnover, or €20 million in assets);

• All listed companies, including SMEs (with proportional standards);

• Non-EU companies generating significant revenue within the EU.

The directive mandates disclosure across the ESG dimensions—Environmental, Social, and Governance—including:

1. Environmental impact – greenhouse gas emissions, resource use, circularity, biodiversity protection.

2. Social performance – labor practices, diversity, equality, and community engagement.

3. Governance – business ethics, risk management, and compliance mechanisms.

A key innovation of the CSRD is the concept of Double Materiality, requiring companies to report both:

• How sustainability issues affect the company (outside-in perspective), and

• How the company impacts society and the environment (inside-out perspective).

This dual focus integrates sustainability into corporate strategy, risk assessment, and stakeholder communication, making it a strategic dimension of value creation rather than an ancillary activity.

In the context of Contemporary Marketing Management, CSRD transforms sustainability reporting into a trust-building mechanism.

It connects corporate transparency with brand integrity, enabling organizations to demonstrate alignment between purpose, performance, and societal expectations.

By linking data disclosure to ethical communication, CSRD reinforces the evolution of marketing toward evidence-based impact storytelling.

Companies such as Iberdrola, Unilever, and Siemens have adopted CSRD-aligned reporting systems that integrate ESG data into their annual reports. These disclosures inform investors, regulators, and consumers, enhancing trust while supporting the transition toward a low-carbon and socially responsible economy.