The Corporate Sustainability Reporting Directive (CSRD), formally Directive (EU) 2022/2464, represents a major reform of corporate reporting within the European Union. Its primary objective is to improve the transparency, consistency, and reliability of sustainability-related information, while aligning sustainability reporting standards more closely with those already established in financial reporting. One of the key concepts introduced by the CSRD is double materiality. This approach requires companies to disclose not only how sustainability issues affect their financial position and business performance, but also how their activities impact the environment and society. In this way, the understanding of corporate responsibility is significantly expanded, enabling a more comprehensive view of corporate operations.

One of the most important innovations of the CSRD is the introduction of the European Sustainability Reporting Standards (ESRS). These standards define which information companies must disclose, how data should be measured, and how it should be presented in reports. Standardization contributes to greater comparability among companies and facilitates informed decision-making by investors, regulators, and other stakeholders. In addition, following the Omnibus reform, the scope of the CSRD has been significantly narrowed, so mandatory reporting remains primarily focused on large companies. The new thresholds introduced through amendments to Article 19a (1) limit the application of the directive to large undertakings, while listed small and medium-sized enterprises (SMEs) are exempted from the mandatory reporting regime. The threshold for non-EU companies has also been increased, meaning that reporting obligations apply only to companies generating more than EUR 450 million in revenue within the European Union market. In practice, however, these obligations do not apply universally to all economic operators, but are mainly directed at very large companies exceeding the thresholds established by the EU regulatory framework. Additional protection has also been introduced for smaller businesses, as so-called “protected companies”, namely companies with up to 1,000 employees, have the right to refuse requests for ESG information exceeding the scope of data defined by voluntary standards. This limits the ability of larger business partners to impose unlimited ESG data requests on SMEs within the value chain.

For companies in Serbia, this means that sustainability requirements and standards will most often be encountered indirectly, through market and business relationships with EU partners, while direct regulatory obligations will generally arise only in specific circumstances. Such circumstances may include companies with a significant business presence in the EU market, companies that are part of groups subject to consolidated reporting, entities with securities listed on regulated EU markets, or companies meeting the thresholds established under relevant EU legislation.

The directive also places emphasis on forward-looking information, including sustainability targets, transition plans, and disclosures relevant to the broader transition of the European Union toward a sustainable economy. Companies are furthermore required to report on impacts across relevant parts of their value chain, including suppliers and business partners, with the aim of improving transparency and accountability in business operations. As part of the 2025 Omnibus package, the regulatory framework was further revised through a narrowing of the scope of obligated entities and a simplification of the ESRS standards, with the goal of reducing administrative burdens and limiting excessive reporting requests within the value chain, while preserving the substantive informational value of disclosed data.

Closely related to the CSRD is the Corporate Sustainability Due Diligence Directive (CSDDD), which complements transparency requirements with more concrete obligations related to the implementation of due diligence processes. While the CSRD primarily focuses on the disclosure of sustainability-related information, the CSDDD is aimed at identifying and managing adverse impacts through the identification, prevention, and mitigation of risks related to human rights and the environment. The directive requires large companies falling within its thresholds to conduct risk assessments and implement appropriate measures within their operations, subsidiaries, and relevant business relationships across the chain of activities. This includes issues such as violations of labor rights, forced labor, child labor, and certain forms of environmental harm. Although companies registered in Serbia will generally not fall directly within the scope of the CSDDD, many will in practice encounter due diligence-related requirements through business relationships with EU partners. This may include requests for information regarding working conditions, environmental protection, supply chain risk management, and compliance with supplier codes of conduct. Export-oriented companies and businesses integrated into international value chains are likely to be particularly affected.

Together, the CSRD and CSDDD represent a significant shift in the EU regulatory framework. They move corporate sustainability from the sphere of voluntary initiatives into a framework of mandatory transparency and accountability. Although compliance with these rules introduces new obligations, it also provides significant benefits. High-quality sustainability reporting improves access to financing, strengthens stakeholder trust, and enhances corporate reputation. At the same time, due diligence processes help companies identify risks, increase resilience, and improve decision-making. In this sense, these directives should not be viewed solely as a regulatory burden, but also as a mechanism supporting companies in becoming more competitive, responsible, and aligned with the transition toward a sustainable and climate-neutral economy.