CSRD Reporting for Financial Advisors and Insurance Brokers

The Corporate Sustainability Reporting Directive (CSRD) is reshaping how financial advisors, insurance brokers and other financial intermediaries communicate their environmental and social impacts. Far from being an abstract compliance exercise, this new framework connects sustainability disclosure to business resilience, investor trust, and client relationships in the financial services sector.

This guide explains how financial advisors, insurance brokers, and other small financial firms can prepare for CSRD and use the Voluntary Sustainability Reporting Standard for SMEs (VSME) to meet growing disclosure expectations. Most financial SMEs are office-based, so also review guidance on CSRD for office SMEs.

1. Why CSRD Matters for Financial Intermediaries

The financial sector is central to Europe’s sustainability transition. Under the EU’s Green Deal and Action Plan on Financing Sustainable Growth, finance professionals are expected to channel capital toward sustainable activities while managing environmental, social and governance (ESG) risks.

CSRD extends reporting duties to:

• Large undertakings and listed SMEs, including credit institutions and insurance undertakings meeting size thresholds.
• Non-listed SMEs that provide sustainability information voluntarily, often to meet client, investor, or banking requests.

Even if your firm is not directly in scope, your clients and counterparties — such as investment managers or insurers — will request ESG data from you to meet their own reporting obligations.

2. Who Must Report and When

Size thresholds (CSRD definition)

An undertaking is large if it exceeds two of the following:

• €25 million balance sheet total
• €50 million net turnover
• 250 employees

Most independent financial advisors and insurance brokers fall below these thresholds — but they may still report voluntarily under VSME to satisfy banks, insurers or clients.

3. What Financial Advisors and Brokers Must Disclose

3.1 Environmental Data

Even small advisory firms consume energy and travel for client meetings. Under VSME Basic Module B3, SMEs are asked to report:

• Energy use from electricity and heating (from bills)
• Scope 1 and 2 greenhouse gas (GHG) emissions
• GHG intensity (emissions divided by turnover)

Quick Win: Use your annual electricity, gas and travel invoices to calculate energy use. Many national sustainability agencies provide free online calculators for SMEs.

3.2 Social Data

The VSME Basic Module B8–B10 covers workforce data:

• Number of employees and gender distribution
• Work-related accidents (even if zero)
• Pay equity and training hours

For small advisory firms, focus on fair pay, training, and equal opportunity disclosures.

3.3 Governance and Conduct

Given the fiduciary role of advisors and brokers, governance disclosures are especially important:

• Anti-corruption and bribery policies (B11)
• Data protection and client trust practices
• Complaints handling and ethical codes (C6–C7 in the Comprehensive Module)

If your firm is authorised under MiFID II or the Insurance Distribution Directive (IDD), much of this information already exists in compliance documentation.

4. Reporting Tools and Frameworks

Use of the VSME Standard

The VSME Basic Module provides a ready-to-use structure for small financial undertakings:

• B1–B2: General information and sustainability practices
• B3–B11: Key metrics on energy, social and governance issues

You can complete the Basic Module in 1–2 days with existing data (bills, payroll, HR records). If clients or investors request more depth, add selected Comprehensive Module disclosures (e.g., climate targets, human rights, gender diversity).

Data Sources for Financial Firms

Tip: Store evidence (bills, reports, policies) for at least five years in case an assurance or client audit is required.

5. Double Materiality for Financial Intermediaries

Under CSRD, companies must assess both impacts and risks — a concept known as double materiality.

For financial advisors and brokers, key examples include:

• Financial materiality: climate-related risks affecting investment portfolios or insurance underwriting.
• Impact materiality: your influence on sustainable investment flows, client awareness, and product suitability.

Even if your own operations are low-impact, your advisory influence has a strong indirect sustainability footprint.

6. Integration with Other EU Rules

Financial and insurance intermediaries already face overlapping EU obligations:

• SFDR (Regulation 2019/2088) – requires ESG disclosures for financial products.
• EU Taxonomy (Regulation 2020/852) – defines sustainable economic activities.
• CSRD – standardises how entities report sustainability information at company level.

CSRD ensures alignment with SFDR and the Taxonomy by requiring disclosures that investors and insurers can use directly.

7. How to Get Started

Step 1 — Map Your Data

List what you already collect for compliance (e.g., AML, IDD, SFDR). Many data points overlap with VSME reporting.

Step 2 — Select Your Module

Most small financial firms start with the VSME Basic Module; larger or network-affiliated firms may add the Comprehensive Module for investor readiness.

Step 3 — Assign Responsibility

Nominate one team member (often compliance or operations) as your sustainability coordinator. No dedicated sustainability officer is required.

Step 4 — Publish or Share

Decide whether to share your sustainability statement:

• Privately with banks or corporate clients, or
• Publicly (e.g., on your website or annual brochure)

8. Example Summary Table for a Small Financial Firm

9. Benefits Beyond Compliance

• Access to green finance: Banks increasingly require sustainability data for lending decisions.
• Client trust: Retail investors value ESG transparency from their advisors.
• Operational efficiency: Tracking energy and waste often identifies cost savings.

Key Terms

• CSRD: EU Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464).
• VSME: Voluntary Sustainability Reporting Standard for non-listed SMEs (EFRAG, 2024).
• Basic Module: Core sustainability disclosures (B1–B11).
• Comprehensive Module: Optional extended disclosures (C1–C9).
• ESRS: European Sustainability Reporting Standards for large undertakings.
• SME: Small and medium-sized enterprise.
• Scope 1 and 2 emissions: Direct and indirect energy-related greenhouse gas emissions.
• Turnover: Total revenue generated during the financial year.