From NFRD to CSRD: The History Behind the Directive Transforming Carbon Accounting

ESG regulations in Europe didn't appear overnight. The CSRD, which now governs corporate sustainability reporting, is the result of a decade-long legislative evolution designed to put climate reporting on equal footing with financial accounting.

A decade of ESG regulation

• 2014 — The NFRD (the predecessor): The EU launches the NFRD. It only covers around 11,000 large companies and lacks strict standardized metrics, leaving too much room for unverified green claims.
• 2019 — The European Green Deal: The EU sets a historic goal: becoming the first climate-neutral continent by 2050. To achieve this, capital flows must be redirected toward genuinely sustainable businesses.
• November 2022 — CSRD is adopted: The European Parliament officially adopts the CSRD. It replaces the NFRD, introduces strict common standards (ESRS), and expands the scope to over 50,000 companies.
• 2024 – 2028 — Progressive rollout: Phased implementation begins. Large corporations are already reporting, and the requirements are expanding year by year to listed SMEs and global supply chains.

Why your SME matters in this timeline

Even if your SME isn't legally mandated to report yet, your large corporate clients are. They are strictly required to track their Scope 3 emissions (supply chain). To keep your contracts, you must be ready to hand over your carbon data.

Carbon Decision AI helps you stay ahead of the curve, turning historical regulatory shifts into a major competitive edge.