ESG reporting
CSRDAlso called corporate Sustainability Reporting Directive, sustainability reporting
ESG reporting under the Corporate Sustainability Reporting Directive (CSRD) is the EU requirement for large companies to publish sustainability information in their management report. Companies report against the European Sustainability Reporting Standards (ESRS) using double materiality, and the information receives external assurance. Omnibus I narrowed scope to companies with more than 1,000 employees and €450m turnover.
How it works
A company first runs a double materiality assessment. It looks at how its activities affect people and the environment, and how sustainability issues affect its finances. Material topics are reported under the ESRS, covering climate, pollution, workforce, value chain workers and governance. Data is drawn from finance, operations, procurement and HR, tagged digitally and placed in the management report for limited assurance.
For banks and insurers the CSRD matters twice. They report on their own operations and financed activities, and they rely on borrowers' and investees' CSRD data for their own disclosures and risk models. Directive (EU) 2026/470 cut the number of companies in scope sharply and lets firms with 1,000 or fewer employees decline value chain data requests that go beyond the voluntary standard.
The rules
Requires sustainability statements in the management report under the ESRS, with limited external assurance.
Large EU companies, listed companies and qualifying non-EU groupsPostponed CSRD reporting for second and third wave companies by two years.
Companies in the second and third CSRD wavesNarrows CSRD scope to companies above 1,000 employees and €450m turnover, with transposition of CSRD changes due by 19 March 2027.
EU companies with over 1,000 employees and over €450m net turnover, and qualifying non-EU groupsCommon questions
Who has to report under the CSRD now?
After Directive (EU) 2026/470, CSRD applies to EU companies and groups with more than 1,000 employees and more than €450m net turnover. Non-EU groups are in scope with more than €450m EU turnover and an EU subsidiary or branch above €200m.
What is double materiality?
Double materiality means a company reports a sustainability topic if it is material from either angle. Impact materiality covers the company's effects on people and the environment. Financial materiality covers how the topic affects the company's cash flows, performance and access to finance.
When do companies in the new scope start reporting?
Companies newly in scope under the Omnibus I thresholds report for financial years starting on or after 1 January 2027, with the first reports published in 2028. Member States have until 19 March 2027 to transpose the CSRD changes.
Does CSRD reporting need an audit?
Yes. The sustainability statement requires limited assurance from a statutory auditor or an accredited independent assurance provider. Limited assurance is a lower level of comfort than the reasonable assurance given on financial statements.
Our coverage
News and analysis on regulatory reporting from RegTech Post.
Read the coverage →RegTech PostEU ESG Reporting: Inside the Corporate Sustainability Reporting DirectiveRead the article →RegTech PostFrom Chaos to Clarity: ESG Compliance ReportingRead the article →
