CSRD: New Sustainability Audit Obligations for French Companies

2025 / MARCH 20

1. Obligation to Prepare a Sustainability Report

Large companies and listed entities are now required to include a sustainability report as part of their management report. This document must provide detailed information on:

• Environmental impact (emission reduction, energy consumption, biodiversity).
• Social commitments (working conditions, inclusion, diversity).
• Governance (anti-corruption measures, ESG strategies, risk management).

2. Mandatory Certification of the ESG Report

To ensure the reliability of ESG data, the sustainability report must be certified by a statutory auditor or an independent third-party body. This verification is essential to guarantee compliance with published information.

3. CSRD Implementation Timeline

The obligation for sustainability reporting and auditing will be phased in based on company size and status:

• January 1, 2024: Large listed companies, credit institutions, and insurance companies (> 500 employees).
• January 1, 2025: Other large companies.
• January 1, 2026: Listed SMEs.

4. Required Assurance Level for the Audit

Initially, a limited assurance level is required for the verification of ESG data. However, a reasonable assurance level may become mandatory from 2028 onwards.

5. Increased Responsibilities for Governance Bodies

The CSRD directive strengthens the accountability of executives and boards of directors, who must ensure compliance with ESG reporting requirements. The audit committee plays a key role in overseeing the integrity and quality of sustainability information.

6. Mandatory Filing of the Sustainability Report

Once certified, the sustainability report must be filed with the commercial court registry along with the company’s annual financial statements.