TheCorporate Sustainability Reporting Directive (CSRD)significantly strengthens sustainability reporting and assurance requirements compared to theNon-Financial Reporting Directive (NFRD). The key shift introduced by CSRD is themandatory assurance of sustainability reports, which includesdefined standards, scope, and providers.
Key Differences Between CSRD and NFRD:Feature
NFRD (Previous Directive)
CSRD (New Directive)
Assurance Requirement
Voluntary
Mandatory
Who Can Provide Assurance?
Organizations could choose any provider
Member States decide between statutory auditors and independent assurance providers
Assurance Scope
Limited guidance
Defined ESRS-based scope
Assurance Level
No formal requirement
Limited assurance initially, transitioning to reasonable assurance by 2028
Reporting Scope
Limited to large public-interest entities
Expanded to all large companies and listed SMEs
Disclosure Framework
High-level requirements
Detailed ESRS framework with sector-specific standards
Mandatory Assurance:
Unlike the NFRD, the CSRDrequires sustainability reports to be assuredby an independent external provider.
The assurance process followsESRS standardsto ensure consistency.
Defined Standards and Scope:
CSRD specifies thescope of assurance, focusing onmaterial sustainability disclosures, governance, andrisk disclosures.
TheEuropean Commissionis developing a standard methodology for assurance.
Transition to Reasonable Assurance:
Initially,limited assuranceis required.
ByOctober 2028, the EU aims to transition toreasonable assurance, aligning sustainability assurance with financial audits.
Option A: Incorrect – TheCSRD makes assurance mandatory, whereas theNFRD had a voluntary approach.
Option B: Incorrect – TheCSRD does not eliminate sustainability reporting assurance; it makes it morestructured and rigorous.
Key Provisions of the CSRD:Why Other Answers Are Incorrect:Thus, thecorrect answer is C:The CSRD introduces mandatory assurance for ESRS reporting, with defined requirements for scope, standards, and providers.
Official References:
CSRD Directive (EU) 2022/2464– Assurance Provisions.
EU Platform on Sustainable Finance Report (February 2025)– Assurance and Compliance Guidelines.
CEAOB Guidelines on Assurance of Sustainability Reporting (2024)– Limited Assurance Transitioning to Reasonable Assurance.
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