- The CSRD targets companies with more than 1,000 employees and €450M net turnover; most mid-sized companies (ETI) below these thresholds are now out of the mandatory scope.
- Even out of scope, ETIs are solicited by their large customers for value-chain ESG data.
- Requirements: ESRS standards, double materiality, external assurance, integration into the management report.
- A strategic lever: better financing access, resilience and, for companies with 1,000 employees or fewer, a proportionate answer to client requests via the VS (formerly VSME).
The CSRD and its scope for mid-sized companies
The CSRD makes sustainability reporting mandatory for certain companies, including large companies and significant mid-sized companies (ETI). It replaces and widens the NFRD to ensure consistent transparency across the EU. See the full detail of who is concerned.
It sets precisely who must report, when and how: mandatory external assurance, integration of the sustainability report into the management report, and the double materiality principle.
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Why the CSRD matters for ETIs
ETIs are key players in the value chains of large CSRD-bound companies. Even when not directly in scope, they are indirectly solicited: their large customers now request traceable ESG data to meet their own obligations. For ETIs, the CSRD becomes a strategic lever: better access to financing, stronger resilience, and structural preparation through frameworks like the VSME. Mid-sized companies with 1,000 employees or fewer are now part of the VS audience, which is open to any out-of-scope company of that size. They are also protected by the value chain cap: from financial years starting on or after 1 January 2027, a CSRD client cannot require from them more than the information set out in the VS.
Scope and eligibility criteria
The CSRD targets companies with more than 1,000 employees and over €450 million in net turnover (most mid-sized companies fall below this and leave the mandatory scope), well above the thresholds of the Accounting Directive 2013/34/EU (balance sheet, net turnover, average headcount). Unlisted SMEs are not bound but remain exposed through upstream-downstream reporting. Parent entities may have to consolidate their subsidiaries' ESG data.
Reporting requirements: ESRS and double materiality
The CSRD mandates the ESRS, which frame content, indicators and formats across 12 topics in three ESG pillars (environment, social, governance). The double materiality principle is the backbone: companies cross-analyze impacts caused and suffered to identify material topics to disclose.
Getting ready: governance, data and controls
The transition requires robust structuring: cross-functional governance (finance, legal, operations); centralized ESG data collection with regular measurement cycles; documented internal controls (e.g. GHG Protocol); and a single management platform to consolidate policies, evidence and improvement plans over time.
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Challenges and best practices for ETIs
The main hurdles are administrative burden, supplier data quality and understanding double materiality. Effective strategies: map value-chain risks and dependencies, digitalize collection and internal validation, align progressively on the VSME, and train teams on ESRS terminology.
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CSRD for ETIs: key takeaways
| Key element | In short |
|---|---|
| Objective | Standardize non-financial reporting in Europe on ESRS |
| Companies concerned | Large companies and significant ETIs, with indirect reach to SME suppliers |
| Double materiality | Combines environmental/social impacts and financial risks |
| Main obligations | Report in the management report, external audit, data traceability |
| Benefits for ETIs | Easier financing, credibility, regulatory anticipation |
