CSRD
Corporate Sustainability Reporting Directive — EU law requiring large European companies to disclose sustainability data including value chain emissions. Cascades ESG data requirements to Indian suppliers of EU brands.
CSRD (Corporate Sustainability Reporting Directive) is an EU regulation that came into force in 2024, requiring large EU companies to disclose sustainability performance under the European Sustainability Reporting Standards (ESRS). It replaced the earlier Non-Financial Reporting Directive (NFRD) and significantly expands both the scope of required disclosures and the number of companies required to report.
Why CSRD Matters for Indian Manufacturers
CSRD requires EU companies to disclose their Scope 3 emissions — which includes emissions from their supply chain (Category 1: Purchased Goods & Services). This means Indian manufacturers supplying EU brands (IKEA, H&M, Zara, Decathlon, Next) are required to provide their Scope 1 & 2 data to their EU buyers for inclusion in the buyer’s CSRD report.
The Cascade Effect
The CSRD requirement creates an indirect compliance cascade for Indian suppliers:
- Large EU brand → mandatory CSRD filing
- CSRD requires Scope 3 disclosure
- Scope 3 requires supplier Scope 1 & 2 data
- EU buyer sends ESG questionnaire to Indian manufacturer
- Indian manufacturer needs verified, traceable emission data to respond
This is why EU buyer ESG questionnaires have become more detailed and more frequent since 2024. The questionnaire is not a preference — it is the mechanism by which the EU buyer satisfies their legal obligation.
CSRD Timeline
- Large companies (>500 employees): first reporting in 2025 (for FY 2024 data)
- Large companies below threshold: 2026 (FY 2025 data)
- Listed SMEs: 2027 (FY 2026 data)
Indian suppliers of early-obligation EU companies are already receiving CSRD-driven data requests. The intensity will increase as more EU companies enter the obligation window.