20 Most Common CSRD Questions from First-Time Reporters
Introduction
If you’re preparing your first Corporate Sustainability Reporting Directive (CSRD) report, you’re not alone. Thousands of EU companies — especially small and growing businesses (SMEs) — are navigating sustainability reporting for the first time. The process can seem technical, but most questions boil down to a few key topics: who needs to report, what to include, and how to get started efficiently.
Below you’ll find the 20 most common questions first-time reporters ask — along with clear, practical answers. Whether you’re a small and growing business (SME) using the VSME Standard or part of a larger group under CSRD scope, this FAQ will help you build confidence and clarity.
Frequently Asked Questions
1. What is the CSRD, in simple terms?
The Corporate Sustainability Reporting Directive (EU 2022/2464) is the EU’s framework for standardised sustainability reporting. It requires companies to disclose environmental, social, and governance (ESG) data alongside financial information — using the European Sustainability Reporting Standards (ESRS).
2. Who needs to report under CSRD?
Currently, all large companies (meeting two of: 250+ employees, €40m turnover, €20m balance sheet) and listed SMEs are required to report. Non-listed SMEs can use the voluntary VSME Standard to align with expectations from clients or banks.
3. When do CSRD requirements start?
CSRD reporting phases in from 2024 to 2028, depending on company size:
- Large public-interest entities: FY2024 (reports in 2025)
- Other large companies: FY2025
- Listed SMEs: FY2026 (with optional delay until 2028)
4. What is the VSME Standard?
The VSME (Voluntary Sustainability Reporting Standard for SMEs), published by EFRAG in 2024, helps smaller non-listed companies report sustainability information proportionately. It’s optional but useful for supplier and financing requirements.
5. Do micro-companies have to report?
No. Micro-companies (under €900,000 turnover and fewer than 10 employees) are exempt from CSRD and VSME obligations, though they can voluntarily disclose key sustainability metrics.
6. What data do I need to collect?
You’ll need data across three main areas:
- Environmental: energy use, GHG emissions, waste, water.
- Social: workforce size, diversity, health and safety.
- Governance: anti-corruption, business conduct, board diversity.
For a step-by-step breakdown, see our guide on how to build a CSRD reporting system from scratch.
7. How long does the first CSRD report take to prepare?
Most small and growing businesses take 3–6 months to prepare their first report, especially if data collection is manual. The time drops significantly once systems and templates are in place.
Compare manual vs software reporting →
8. Can I use Excel or do I need software?
Yes, you can start in Excel — that’s how most first-time reporters begin. Software tools become valuable once you track multiple sites or data streams, as they automate collection and calculations.
9. How accurate does my data need to be?
Your data should be reasonable and verifiable, not perfect. The CSRD prioritises transparency over precision, especially for small and growing businesses in early years. Clearly document assumptions or estimation methods.
10. What happens if my data isn’t complete?
That’s acceptable — as long as you explain what’s missing and plan to improve next year. The EU encourages a “progressive improvement” approach for small and growing businesses.
See how to phase in data collection in integrating CSRD workflows.
11. Do I need to report Scope 3 emissions?
Only if material to your business. For most small and growing businesses, reporting on Scope 1 (direct) and Scope 2 (purchased energy) emissions is sufficient in the first year. Larger supply chain actors may request partial Scope 3 data.
12. What are “material topics” under CSRD?
Material topics are sustainability issues that significantly impact your business or stakeholders. Identifying them is done through a double materiality assessment, looking at both financial and environmental/social impacts.
13. How often do I need to report?
CSRD reports are annual, typically alongside your financial statements. The same applies if you use the VSME Standard — once per financial year.
For time planning, use our annual CSRD reporting calendar.
14. Who reviews my report?
Under CSRD, sustainability information must be reviewed by an independent assurance provider (often your financial auditor). For VSME reporters, third-party review is optional but recommended.
15. What’s the difference between “limited” and “reasonable” assurance?
- Limited assurance: The auditor checks for obvious errors and consistency (moderate confidence).
- Reasonable assurance: A deeper audit, similar to financial audits. Currently, CSRD only requires limited assurance.
Learn how to prepare for your first audit →
16. How do I choose which ESRS standards to apply?
Start with ESRS 1 and 2 (general requirements and disclosures), then select topic-specific standards relevant to your business, such as E1 Energy, S1 Workforce, or G1 Governance.
17. Can I report using VSME instead of full ESRS?
Yes, if you’re not legally required to report under CSRD. The VSME Standard mirrors ESRS topics but with fewer data points and simpler language — ideal for small and growing businesses supplying to large clients.
18. How do I make sure my data is audit-ready?
- Keep source documents (invoices, HR records, bills).
- Maintain version control in your data files.
- Record how each number was calculated.
- Run an internal pre-check before submission.
See how to streamline this in integrating CSRD data collection workflows.
19. Can CSRD help my business financially?
Yes. Good sustainability reporting can unlock green financing, improve supplier competitiveness, and strengthen your brand. Banks and investors increasingly use CSRD-style disclosures to assess risk and opportunity.
20. What’s the simplest way to start?
Start small. Pick 3–5 key metrics that matter most (energy, waste, workforce size), document your data sources, and expand over time. The important part is to begin — improvement comes with each cycle.
Key Terms
- CSRD – Corporate Sustainability Reporting Directive (EU 2022/2464) setting EU-wide sustainability reporting standards.
- VSME – Voluntary Sustainability Reporting Standard for SMEs (EFRAG 2024).
- ESRS – European Sustainability Reporting Standards used for CSRD compliance.
- Scope 1, 2, 3 – Categories of greenhouse gas emissions.
- Assurance – Independent verification of sustainability information.
- Double Materiality – Assessment of both how sustainability affects your business and how your business affects the environment and society.
Conclusion
Your first CSRD report doesn’t need to be perfect — it needs to be honest, structured, and consistent. By understanding the basics, documenting your data sources, and following recognised standards like VSME, you’ll be well on your way to compliant and credible sustainability reporting.
Once you’re ready to move from learning to doing, check out our practical guide on how to build a CSRD reporting system from scratch.