What is the CSRD? Understanding the effect of the EU Directive on the disability community

The European Union’s Corporate Sustainability Reporting Directive (CSRD) is designed to make companies more accountable and inclusive by embedding sustainability into their core operations. By introducing new reporting requirements, the CSRD encourages businesses to treat environmental, social, and governance (ESG) as essential to their financial health and long-term resilience.

Under the Directive, companies must regularly disclose clear, detailed information about their sustainability efforts. This transparency allows stakeholders, including investors, consumers and policymakers, to make more informed decisions and better understand a business’s sustainability risk and impacts.

An introduction to the CSRD

The European Union approved the CSRD in December 2022. Following its publication in the Official Journal of the European Union that same month, the European Financial Reporting Advisory Group (EFRAG), an independent advisory body, spent months developing the reporting standards that companies must follow for their ESG disclosures. The European Commission adopted these European Sustainability Reporting Standards (ESRS) in July 2023.

EU member states had until 6 July 2024 to adapt their national laws to incorporate the Directive (a process called transposition). For example, Ireland implemented the CSRD through the European Union (Corporate Sustainability Reporting) Regulations 2024.

Who must comply?

Importantly, the CSRD applies to not only European companies but also to non-EU companies with subsidiaries or branches in the EU— provided they meet certain thresholds for turnover, assets, and employees within the region.
 

When is the compliance deadline?

The CSRD has phased reporting requirements, meaning companies must comply by different deadlines based on their size and turnover.

1 January 2025: From 1 January of this year, publicly listed companies with more than 500 employees have had to report on FY 2024. These companies were already subject to the EU Non-Financial Reporting Directive, which the CSRD replaces.

1 January 2026: Large companies must report on FY 2025 if they meet at least two of the following criteria:

• €25 million in assets, 
• €50 million in turnover, or 
• 250 employees.

1 January 2027: Listed SMEs must report on FY 2026 if they meet at least two of the following criteria:

• €5 million in assets,
• €10 million in turnover, or 
• an average of 50 employees during the FY.

SMEs can ‘opt out’ of reporting until 2028.

Some businesses are exempt from reporting, including micro-SMEs that meet at least two of the following criteria:

• assets of less than €450,000, 
• turnover of less than €900,000, or 
• fewer than 10 employees.

Limited partnerships and cooperatives are also exempt.

What are the penalties for non-compliance?

Each EU member state sets its own penalties for non-compliance, but the Directive requires those penalties to be effective, proportionate, and dissuasive. In Ireland, penalties include fines and possible imprisonment for company directors.
 

What role does disability reporting play in the CSRD?

Reporting on persons with disabilities under the CSRD primarily falls within the ESRS’s Sustainability Standards. While some standards specifically reference disability, it should also be factored into standards that reflect diversity policies.
 

The definition of persons with disabilities

In defining a person with disabilities, EFRAG aligns its definition with the UN Convention on the Rights of Persons with Disabilities. As a result, the ESRS defines persons with disabilities as individuals who have:

“…long-term physical, mental, intellectual, or sensory impairments which, in interaction with various barriers, may hinder their full and effective participation in society on an equal basis with others.”

Because the CSRD is implemented through national legislation, the specifics of reporting requirements may vary between EU member states. However, the ESRS provides a unified definition of persons with disabilities, and this definition emphasises the social model of disability, which focuses on societal barriers rather than individual impairments as the key factors affecting access and participation.

European Sustainability Reporting Standards that directly address disability

The ESRS cover a wide range of people and contexts, with many diversity and inclusion standards that encompass disability. For example, companies must report on diversity and inclusion trainings, diversity policies, targeted recruitment of underrepresented groups (including persons with disabilities), and the composition of boards and management, which should account for disability.

However, in addition to these broader requirements, some standards specifically address disability, setting clear reporting obligations for companies.

ESRS S1—Own workforce

This standard requires companies to report workforce data, including the number and percentage of employees with disabilities. It also mandates disclosure of processes for engaging with employees or workers’ representatives to gain insights into the perspectives of those who may be particularly vulnerable or marginalised, such as persons with disabilities. If no such process exists, the company must state this explicitly.

Additionally, S1 requires companies to report on social protection coverage—whether all employees are covered against income loss due to work-related injury or acquired disability and workplace discrimination—any reported incidents of disability-related discrimination. Companies also have the option to disclose accessibility improvements—any adjustments made to the built environment to support the health and safety of employees, customers, or visitors with disabilities.

ESRS S2—Workers in the value chain

This standard ensures companies report on the treatment of workers in their supply chain, ensuring fair treatment and equal opportunities in areas such as pay, training, career development, and employment protections—including for persons with disabilities.

Similar to S1, companies must disclose their process for engaging with workers in the value chain to gain insights into the perspectives of those who may be particularly vulnerable or marginalised, such as persons with disabilities. If no such process exists, the company must state this explicitly.

ESRS S4—Consumers and end users

This standard requires companies to report on their impact on consumers and end users, focusing on fair treatment, accessibility, and safety. It places specific attention on inclusive products and services, including those designed for persons with disabilities.

Similar to S1 and S2, companies must disclose their process for engaging with, and gaining insights into the perspectives of, consumers and end users who may be particularly vulnerable or marginalised, such as persons with disabilities.

Additionally, companies must report on targets for managing both positive and negative material impacts. For example, they may set objectives for improving online accessibility for persons with disabilities. These targets can include short-, medium-, and long-term goals, with timelines for completion.

Double materiality and disability reporting

The CSRD is based on the concept of double materiality, which considers both impact materiality and financial materiality. Impact materiality refers to how a company’s activities and operations affect sustainability issues, while financial materiality focuses on the financial risks and opportunities associated with a company’s sustainability efforts—or lack thereof.

For example, many companies are facing supply chain disruptions because of climate change, which poses a financial risk. They must report on the risk and any efforts to mitigate it. On the other hand, a company investing in energy-efficient buildings can highlight the financial benefits of those efforts, such as lower utility costs.

When it comes to disability reporting, companies must assess whether their activities and practices have a positive or negative impact on people with disabilities within their own operations, consumer base, supply chains, and the communities in which they operate. Approximately 16 percent of the world’s population—1.3 billion people—lives with a disability. By failing to provide accessible products, services, and environments to this population, companies increase their financial risks and miss out on valuable opportunities, such as talent recruitment, new market opportunities, and brand enhancements. 

After all, companies that improve disability inclusion over time are four times more likely to outperform competitors in total shareholder returns. Businesses that are inclusive of persons with disabilities see 28% higher annual revenue, driven by greater innovation and the ability to reach new markets. Furthermore, organisations with strong disability community outreach programmes also benefit from lower staff turnover—up to 30% less than their competitors.

The long-term impact of the CSRD on individuals with disabilities

By requiring companies to disclose specific information, the CSRD increases transparency around business operations. However, while it mandates reporting, it does not legally require companies to change their operations.

That said, the Directive compels businesses to disclose both their strengths and weaknesses, including the risks and opportunities tied to their sustainability efforts. As a result, the CSRD provides stakeholders with the information they need to hold companies accountable for their inclusion practices, including disability inclusion. This required transparency can encourage businesses to rethink their approaches to accessibility—in both their workforce and value chains—so that they design more inclusive environments, products, and services.

Furthermore, to meet reporting standards, companies must conduct a rigorous analysis of their operations, the results of which are auditable as part of CSRD reporting. This analysis will spotlight areas where businesses already excel in disability inclusion and those where they need to improve. In essence, by completing this process, companies have already carried out a gap assessment. With this insight, they have the information needed to take meaningful steps toward greater accessibility and inclusion.

This introduction draws heavily on the work of Disability IN. For a comprehensive overview of disability inclusive legislation in the EU, check out A Legal Analysis to Guide Corporate Responsibilities Under New EU Disability Inclusive Legislation.