Corporate Sustainability Reporting Directive (CSRD)

What is the CSRD?

The CSRD (Corporate Sustainability Reporting Directive) was introduced in 2021 to hold companies accountable for their sustainability efforts, or lack thereof, by requiring them to report on how their business impacts the environment, and which climate and ESG risks may affect their business. It replaces the older (NFRD) Non-Financial Reporting Directive, and brings significantly more companies under its scope.

Following the Omnibus I package proposal in 2025 which aimed to reduce the CSRD reporting burden for small and medium-sized companies, the thresholds for mandatory CSRD reporting were changed.

Wave 1 of CSRD included any company that was already subject to the NFRD, while Wave 2 now applies to companies that meet or exceed the following thresholds: 

• €450 million net turnover [applies to non-EU companies too]
• More than 1,000 employees

What is the implementation period? 

The implementation period is staggered based on company size, with wave 1 (companies that were already subject to the NFRD) reporting under CSRD since 2025. Wave 2 companies are required to publish their first CSRD report (aligned with ESRS standards) in 2028 for the previous financial year.

How are companies not in scope of the CSRD impacted? 

For companies outside the CSRD scope, the voluntary sustainability reporting standard (VSME) is the EU's recommended sustainability reporting standard, and it’s likely to become a delegated act in 2026. CSRD-bound companies can request data points covered by the VSME from their suppliers—of any size—so aligning with it ensure you have the required data readily available for your larger clients.

Read more about the differences between the CSRD and the VSME in our article.