Blog: What the Heck is CSRD? (And Why Pharma Suppliers Should Care)

Sustainability legislation is evolving fast — and one acronym you definitely need to be familiar with is CSRD.

The Corporate Sustainability Reporting Directive might sound like just another regulatory box to tick, but it’s set to transform how businesses — including pharma and healthcare suppliers — approach ESG (Environmental, Social, and Governance) practices and reporting.

Even if your company is small, virtual, or outside the EU, don’t scroll past just yet. If you work with global pharma clients or are part of a multinational supply chain, CSRD could still affect you.

So… What Is the CSRD?

The Corporate Sustainability Reporting Directive (CSRD) is a new European Union regulation that came into effect in 2023. It requires large companies operating in the EU to publicly disclose detailed information on how they impact people and the planet.

It replaces and strengthens the older Non-Financial Reporting Directive (NFRD), and it's designed to standardize how companies communicate their sustainability efforts — no more vague claims or inconsistent metrics.

Key CSRD facts:

• Applies to all large companies based in or operating within the EU
• Requires them to publish audited sustainability reports alongside financial reports
• Phased rollout from 2024 to 2028, based on company size and location
• Includes detailed metrics on emissions, energy usage, human rights, governance, and more
• Will set the global tone for ESG disclosure, even beyond Europe

Why Should You Care?

You might be thinking: “We're not based in the EU. We’re a supplier or agency. Surely this doesn’t apply to us…”

But it does. Here's why:

• 1. If your clients are in scope, you are too.

Many pharma companies already fall under CSRD — and their suppliers will be expected to provide ESG data as part of their procurement, audits, and due diligence. So if you want to win (or keep) contracts with big pharma, you’ll likely need to align with CSRD expectations.

• 2. CSRD is raising the bar — globally.

Even outside the EU, governments and industries are looking to CSRD as a template for future regulations. Getting ahead now could future-proof your business.

• 3. It’s not just about compliance. It’s about credibility.

Sustainability reports — when done well — don’t just tick a box. They build trust, attract like-minded partners, and help you stand out in a competitive market.

Where to Start (Without Getting Overwhelmed)

You don’t need to become a policy expert overnight. But you do need to start laying the foundations now.

Here’s what Arjun Anand, M3’s Group Sustainability Manager, recommends:

• 1. Conduct a materiality assessment

This helps you understand which sustainability topics are most relevant to your business, clients, and impact — and where to focus your efforts. Ask yourself:

• What do our stakeholders (clients, team, regulators) expect?
• Where do we have the most significant environmental or social impact?
• What’s already being tracked? What’s missing?
• 2. Understand your emissions

Start measuring your carbon footprint — even if it's just from data hosting, remote working, or travel. Tools like carbon accounting software or even Excel-based templates can help at the start.

• 3. Align with recognised frameworks
• SBTi (Science-Based Targets initiative): For climate-related goal setting
• EcoVadis: For proving your ESG credentials to clients during procurement
• CDP: For disclosing your environmental data

These are all recognised by large pharma organisations — and aligning with them builds trust and opens doors.

• 4. Be transparent — even if you’re not perfect

It’s better to say, “We’ve started measuring X and are working on Y” than to stay silent. Greenhushing (the fear of sharing sustainability efforts in case they’re criticised) is becoming just as problematic as greenwashing.

As Arjun said in our recent webinar: “Sustainability isn’t about being perfect. It’s about progress. Companies should share their journey — even the messy parts.”

Final Thought

Whether you're a small research agency, a digital platform, or a service provider in the healthcare ecosystem, CSRD will impact you — directly or indirectly.

Don’t wait to be told to act. Clients are already asking more questions, regulators are raising standards, and the companies who lead on sustainability will be the ones who win trust, partnerships, and long-term growth.

Start where you are. Use the tools available. And keep moving forward.