A
Annual Sustainability Statement
Definition
An annual sustainability statement is the formal ESG reporting output required under the EU Corporate Sustainability Reporting Directive (CSRD) (Directive (EU) 2022/2464). It forms part of a company’s management report and must be prepared in accordance with the European Sustainability Reporting Standards (ESRS). The statement must cover information on: environmental matters (climate, pollution, water, biodiversity, circular economy); social matters (own workforce, workers in value chain, affected communities); governance matters (business conduct); and the company’s due diligence process. From the 2024 financial year, Wave 1 companies (large public interest entities with >500 employees) must publish their first annual sustainability statements.
Source
CSRD (EU) 2022/2464, Article 19a; ESRS Set 1 (Commission Delegated Regulation (EU) 2023/2772); Omnibus I provisional agreement (December 2025).
Practical Explanation (Compliance Context)
Wave 1 companies are already preparing or have published their first sustainability statements for the 2024 financial year. The ESRS Quick-Fix Delegated Act (published November 13, 2025) allows Wave 1 companies to maintain and in some cases reduce reporting levels for 2025 and 2026 reporting. Under the Omnibus I provisional agreement, the scope threshold for future CSRD obligation is proposed to rise to >1,000 employees, significantly reducing the number of affected companies.