- The CSRD is the EU directive governing sustainability reporting; it replaces the NFRD with an unprecedented level of requirement.
- It relies on the ESRS standards (12 ESG topics) and the double materiality principle.
- Sustainability information is built into the management report and subject to mandatory external assurance.
- The scope was significantly narrowed by the Omnibus (more than 1,000 employees and €450M net turnover); SMEs remain affected through the value chain.
What is the CSRD?
The Corporate Sustainability Reporting Directive (CSRD) is the European directive on sustainability disclosure. It replaces the NFRD, widening both the scope and the level of requirement. The CSRD requires large companies and public-interest entities to publish audited sustainability reports, built into the management report and based on uniform criteria. Learn more in our overview of the CSRD directive.
Its core goals are transparency, ESG data comparability and the reliability of published information, to strengthen investor trust and steer capital toward sustainable models.
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Which companies are concerned
The directive targets large companies and listed entities under the thresholds of the Accounting Directive 2013/34/EU (balance sheet, turnover, headcount). Around 1,000 European companies are currently in scope after the 2026 Omnibus I adjustment. See the detail of who is concerned by the CSRD.
Unlisted SMEs are not in the mandatory scope, but they remain affected: their CSRD-bound customers and buyers request reliable ESG data across the value chain.
Reporting standards: the role of the ESRS
The CSRD relies on the European Sustainability Reporting Standards (ESRS), which define what to disclose across 12 topics in three pillars:
- Environment: climate, pollution, resources, biodiversity.
- Social: working conditions, human rights, equality, safety.
- Governance: ethics, strategy, risk management.
The double materiality principle is central: impact materiality (the company's effects on society and the environment) and financial materiality (how ESG issues affect the company's performance and risks).
Assurance, audit and reliability
The CSRD requires mandatory external assurance of sustainability information, close to the reliability expected for financial accounts. Companies should anticipate internal reviews before submission, full documentation of methodologies (e.g. the GHG Protocol), and a traceable internal control system. This aligns ESG assurance with financial standards.
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Operational preparation and governance
Implementing the CSRD means a structural reorganization: clear governance across finance, legal, CSR and operations; centralized ESG data collection; regular reporting and validation cycles; and digitalized, traceable evidence flows. An integrated ESG management platform centralizes policies, indicators and evidence, and simplifies the production of ESRS-compatible reports, feeding your non-financial reporting.
How it fits with other frameworks
The CSRD differs from voluntary or related frameworks: the NFRD it replaces, the ESRS that detail its technical requirements, the VSME (simplified voluntary version for SMEs), and CDP / IFRS S2, already aligned with ESRS E1 to ease data interoperability. This coherence lets you reuse ESG data across questionnaires (EcoVadis, CDP, SFDR).
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CSRD regulation: key takeaways
| Theme | Key points | Implications for companies |
|---|---|---|
| Nature of the CSRD | EU directive on sustainability reporting | Transparency, assurance and double materiality |
| Companies concerned | Companies above 1,000 employees and €450M net turnover | SMEs still affected via the value chain |
| Standards | ESRS (12 ESG topics) | Normalized data; draft revised ESRS: 60%+ fewer datapoints |
| Assurance | Mandatory external verification | Prepare traceability and documentation |
| Framework alignment | NFRD, SFDR, CDP, IFRS S2 | Reuse and consistency of data |
