The European Union’s Corporate Sustainability Reporting Directive: impact on corporate boards

Heida Oskarsdottir, Throstur Olaf Sigurjonsson and Runolfur Smari Steinthorsson

International Journal of Law and Management, 2025, vol. 68, issue 6, 965-980

Abstract: PurposeStandardized corporate sustainability reporting is a central component of the European Union (EU)’s sustainability policy. The Corporate Sustainability Reporting Directive (CSRD) enhances transparency and accountability in corporate sustainability practices. This study offers a theoretical overview of the CSRD’s impact on company boards, with a focus on their sustainability reporting and governance responsibilities.Design/methodology/approachThis study conducts a theoretical analysis of the CSRD by reviewing its provisions and implications for corporate governance. It is based on a detailed review of the directive’s text and relevant literature on sustainability reporting and governance frameworks.FindingsThe CSRD does not impose direct obligations on company boards to act on sustainability matters. The board’s primary duty is to prepare, submit and publish an annual report, including sustainability information. While the directive mandates transparency, it does not require specific sustainability actions. However, the reporting requirements indirectly emphasize the board’s strategic decision-making and oversight role. Boards must ensure the accuracy of sustainability information and make informed decisions on integrating sustainability into the company’s strategy. Companies that neglect sustainability considerations risk hindering their long-term viability, as the directive aims to direct investor capital toward sustainable business activities.Originality/valueThis study provides a theoretical examination of the CSRD’s indirect effects on board responsibilities. It highlights the directive’s role in shaping corporate governance and emphasizes the strategic importance of sustainability in aligning corporate operations with the EU’s sustainability objectives.

Keywords: Sustainability reporting; Corporate Sustainability Reporting Directive (CSRD); Board responsibilities; EU sustainability policy (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijlmap:ijlma-03-2025-0106

DOI: 10.1108/IJLMA-03-2025-0106

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