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GRI Exam ESRS-Professional Topic 3 Question 10 Discussion

Actual exam question for GRI's ESRS-Professional exam
Question #: 10
Topic #: 3
[All ESRS-Professional Questions]

Which of the following statements about the EU's Corporate Sustainability Reporting Directive (CSRD) and its predecessor, the Non-Financial Reporting Directive (NFRD), are correct? Select all options that apply.

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Suggested Answer: B, E

The Corporate Sustainability Reporting Directive (CSRD) replaced the Non-Financial Reporting Directive (NFRD) to address its limitations in scope and reporting requirements. Below are the explanations for each option:

A . False -- The NFRD did not require all companies in the EU to include a non-financial statement. Instead, it applied only to large public-interest entities with 500 or more employees.

B . True -- The NFRD applied to large public-interest entities, including listed companies, banks, and insurance firms with more than 500 employees.

C . False -- The NFRD did not mandate external assurance for sustainability information. The CSRD introduced mandatory assurance at the EU level.

D . False -- The CSRD did not replace the NFRD; rather, it expanded and strengthened reporting requirements. The NFRD was replaced by the CSRD, but not the other way around.

E . True -- The CSRD was introduced to improve the scope and depth of sustainability reporting compared to the NFRD. It expanded the number of entities required to report, standardized disclosures via ESRS, and introduced third-party assurance requirements.

Key Differences Between CSRD and NFRD

Feature

NFRD (Old Directive)

CSRD (New Directive)

Scope

Large public-interest entities (500+ employees)

All large companies + listed SMEs

Assurance

Not required

Mandatory external assurance

Disclosure Requirements

Limited sustainability disclosures

Comprehensive ESRS-based reporting

Reporting Standards

No standardized framework

ESRS-based mandatory framework

Application Date

In force since 2018

Applies from 2024 onwards

Official Reference:

CSRD Directive (EU) 2022/2464 -- Assurance & Reporting Provisions.

ESRS Compilation Explanations January - November 2024.


Contribute your Thoughts:

Aliza
15 days ago
This is easy - B, E, and maybe C. I heard the CSRD will require independent assurance, but I'm not sure if that's across all EU countries.
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Emile
24 days ago
B and E for sure. The NFRD was a step in the right direction, but the CSRD is really going to shake things up.
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Lucy
7 days ago
E) The CSRD was introduced to address the limitations of the NFRD in scope and reporting requirements.
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Lili
10 days ago
B) The NFRD applied to large public-interest entities with 500 or more employees, such as listed companies, credit institutions, and insurance undertakings.
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Kris
28 days ago
I believe E is also correct. The CSRD was indeed introduced to address the limitations of the NFRD.
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Lisandra
30 days ago
Definitely A, B, and E. The NFRD had a lot of gaps, and the CSRD is a much-needed improvement.
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Odelia
18 days ago
Yes, the NFRD applied to large public-interest entities with 500 or more employees.
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Ahmed
20 days ago
I agree, the NFRD required all companies to include a non-financial statement.
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Kaycee
1 months ago
I agree with Yuette. The NFRD did require non-financial statements from large public-interest entities.
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Yuette
1 months ago
I think A and B are correct.
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Dustin
1 months ago
I think options B and E are correct. The NFRD had a limited scope, and the CSRD aims to expand the reporting requirements.
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Linwood
6 days ago
So, the CSRD aims to expand reporting requirements for a wider range of organizations.
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Britt
13 days ago
Yes, the CSRD was introduced to address the limitations of the NFRD.
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Bernardo
27 days ago
I agree, the NFRD only applied to large public-interest entities.
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