The CSRD and the ESRS standards - what, who, when?

What is CSRD?

The Corporate Sustainability Reporting Directive (CSRD) is an EU regulation that requires companies to report on their environmental, social, and governance (ESG) impact.

It aims to make sustainability data:

• More transparent
• More comparable
• More reliable

What are ESRS?

The European Sustainability Reporting Standards (ESRS) define what you need to report under CSRD. ESRS were developed in response to the need for more consistent and comparable sustainability reporting across the EU. Prior to their introduction, sustainability reporting varied significantly in scope, detail, and quality, making it difficult for stakeholders to assess and compare companies' sustainability performance.

The ESRS provide a structured framework covering:

• Environmental topics (e.g. climate, biodiversity)
• Social topics (e.g. workforce, communities)
• Governance topics (e.g. business conduct)

Important: Companies are only required to report on topics that are material to their business, based on a double materiality assessment.

What’s New (Simplified ESRS)

The EU is currently working on simplifying ESRS requirements to reduce complexity.

At this stage, the simplified ESRS is still in draft form and has not yet been formally adopted. The European Commission is expected to adopt the final version around mid-2026, after which it will form the basis for future reporting requirements.

Expected changes include:

• Fewer mandatory datapoints
• Stronger focus on material information
• Improved alignment with international standards

Who Needs to Report?

Under the updated CSRD scope, reporting requirements focus on the largest companies.

CSRD applies to:

• EU companies with more than 1,000 employees and €450M+ net turnover
• Parent companies of large groups meeting these thresholds
• Non-EU companies with significant activity in the EU

What is a “Large Company”?

The definition of “large company” has changed in the context of CSRD.

While the general accounting definition (based on size criteria) still exists, CSRD now primarily applies to companies that:

• Have more than 1,000 employees
• Generate more than €450M in net turnover

This means that fewer companies are now in scope compared to earlier versions of the regulation.

When Do You Need to Report?

The CSRD is being implemented in phases. Recent regulatory updates (Omnibus) have introduced changes to both scope and timeline.

Current expectations:

• 2025–2026: Reporting obligations may still apply to companies previously in scope (e.g. under NFRD), depending on national implementation
• From financial year 2027 (expected): Companies under the updated CSRD scope begin reporting
• Later phases: Non-EU companies follow based on their level of activity in the EU

The updated thresholds have been politically agreed at EU level. Final legal adoption is expected following formal approval and publication.

? Member States may allow temporary exemptions for certain companies (e.g. former “Wave 1” companies falling below the new thresholds) for the 2025 and 2026 reporting years.

What Should You Do Now?

To prepare for CSRD reporting:

• Conduct a double materiality assessment
• Identify relevant ESRS disclosures
• Set up data collection processes
• Align internal stakeholders (e.g. sustainability, finance, compliance)

Key Takeaway

• CSRD makes sustainability reporting mandatory
• ESRS defines what needs to be reported
• Reporting focuses on material topics, not all possible disclosures
• Early preparation helps avoid complexity later