This page was reviewed and updated on 27/02/26.
Since 5 January 2023, large and listed companies in the EU have been required to align with the Corporate Sustainability Reporting Directive (CSRD). The directive updates business requirements for reporting on social and environmental information. We’ve highlighted the need-to-know information for businesses in our latest guide.
What are the new CSRD reporting rules?
The EU Corporate Sustainability Reporting Directive (CSRD) is a regulatory framework introduced by the European Union to enhance corporate sustainability reporting. The CSRD replaces the existing Non-Financial Reporting Directive (NFRD) and aims to improve the quality, consistency, and comparability of sustainability information disclosed by companies.
Under the CSRD, large and listed companies (apart from listed micro-enterprises) must report on a broader range of sustainability-related matters, including environmental, social, and governance (ESG) factors. The directive sets out detailed rules for reporting, including mandatory disclosure of specific sustainability indicators and reporting on sustainability policies, risks, and targets. The framework also aims to create a culture of transparency regarding the impact of companies on people and the environment.
What kind of businesses does the CSRD apply to?
Following amendments introduced under the Omnibus I Directive, the scope of the CSRD has been significantly refined.
EU undertakings are now in scope only where they exceed both €450 million net turnover and an average of 1,000 employees during the financial year. This assessment applies at both individual company and consolidated group level.
The shift from the earlier CSRD thresholds and focuses reporting obligations on the largest organisations operating in the EU.
Companies within the value chain employing fewer than 1,000 employees may decline requests for sustainability information beyond what is outlined in the voluntary reporting standards for SMEs, helping to reduce indirect reporting pressures on smaller businesses.
Any companies already subject to NFRD that continue to meet revised thresholds must comply with the CSRD.
Does the CSRD apply to UK businesses even though we aren’t in the EU?
The CSRD can apply to non-EU companies, including UK-based organisations, where they have significant operations within the EU.
A non-EU parent undertaking may fall within scope where it generates more than €450 million in net turnover within the EU and has an EU subsidiary or branch generating more than €200 million in turnover.
Non-EU companies meeting these thresholds are required to comply with CSRD reporting requirements in respect of their EU activities.
What do companies need to report?
Companies covered by the CSRD will need to report according to the European Sustainability Reporting Standards (ESRS). The first set of ESRS was adopted in July 2023, and companies will be required to report on a wider range of ESG standards, including double materiality and value chain impact. The adoption of sector-specific standards was initially scheduled for June 2024 but has been postponed to June 2026.
The European Commission is also required to adopt revisions to the ESRS by 18 September 2026 to reflect the simplification measures and updated scope introduced under the Omnibus I Directive.
When will reporting start?
The CSRD is set to be phased in gradually depending on company size and existing reporting obligations. Reporting timelines are linked to financial year start dates.
Under the original CSRD phase-in:
- Companies already required to report under the NFRD began reporting for financial years beginning on or after January 1, 2024, with their reports published in 2025.
- Other large EU companies were expected to begin reporting from financial years starting on or after January 1, 2025 (with publication in 2026).
- SME public interest entities were scheduled to start reporting for financial years beginning on or after January 1, 2026, with reports published in 2027.
- SME non-public interest entities could opt out of the reporting requirements until financial years starting before January 1, 2028, provided they explain their decision in their management reports.
However, the Omnibus I Directive significantly narrowed the scope of CSRD. As a result:
- Many companies previously expected to report may no longer fall within scope under the revised €450 million turnover and 1,000 employee thresholds.
- Companies that prepared for reporting but no longer meet the updated criteria may benefit from transitional relief.
EU Member States must transpose the CSRD amendments into national law by March 2027. Organisations should reassess their position against the revised thresholds to determine whether and when reporting obligations apply.
Omnibus I amendments to the CSRD
The CSRD was amended through Directive (EU) 2026/470 under the EU’s Omnibus I simplification package, which aims to improve proportionality and reduce administrative burden while maintaining transparency requirements for the largest organisations.
Key confirmed changes include:
- A significantly narrowed scope based on the €450 million turnover and 1,000 employee threshold.
- Protections for smaller value chain entities through limits on information requests.
- Targeted disclosure relief where information cannot reasonably be obtained or where disclosure may harm legitimate commercial or security interests.
- A requirement for the European Commission to revise the ESRS.
These amendments reflect a move towards more targeted sustainability reporting focused on organisations with the greatest economic and value chain influence.
The CSRD is set to continue shaping ESG reporting expectations for in-scope businesses across the EU – don’t wait to prepare for the directive’s standards. Get in touch with our experts at Sustainable Energy First so your organisation will be ready the new reporting directive.
