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What is CSRD? A complete guide
The Corporate Sustainability Reporting Directive explained — what it is, who reports, when, and what the ESRS structure looks like.
Dcycle Team 5 min The Corporate Sustainability Reporting Directive (CSRD) is the EU regulation that requires companies to report ESG matters using standardised formats. Adopted in January 2023, it replaces the Non-Financial Reporting Directive (NFRD) and adds mandatory third-party assurance plus digital XBRL reporting.
Who must report
CSRD applies in waves by company size. After the Omnibus I simplifications, the thresholds tightened:
| Wave | First reporting year | Companies in scope |
|---|---|---|
| 1 | FY 2024 (report in 2025) | Large public-interest entities already under NFRD (500+ employees) |
| 2 | FY 2025 (report in 2026) | Large EU companies — see Omnibus thresholds |
| 3 | FY 2026 (report in 2027) | Listed SMEs and small credit institutions |
| 4 | FY 2027 (report in 2028) | Non-EU companies with €150M+ EU revenue |
Under Omnibus I, large companies now need both 1,000+ employees AND €450M+ turnover. See Omnibus I: what changed for the full delta.
What to report — ESRS structure
The European Sustainability Reporting Standards organise disclosures in three pillars:
- Environment (E1–E5): climate change, pollution, water and marine, biodiversity, circular economy.
- Social (S1–S4): own workforce, value-chain workers, affected communities, consumers and end-users.
- Governance (G1): business conduct, anti-corruption, lobbying.
Post-Omnibus, the standards drop from 1,073 to 320 mandatory data points.
Double materiality
Before disclosing anything, you run a double materiality assessment to decide which ESRS topics apply. A topic is material if it meets the threshold on either dimension:
- Impact materiality — how your company affects people and the environment.
- Financial materiality — how sustainability issues affect your business.
The DMA usually takes 6–8 weeks with stakeholder engagement. See Double materiality, step by step.
Key requirements
- Assurance: limited assurance from an independent auditor from year one. Reasonable assurance was originally planned but Omnibus I dropped it.
- Format: XBRL-tagged report filed as part of your management report.
- Value chain: limited reporting on suppliers under 1,000 employees (the “PSME cap” introduced by Omnibus I).
Where to start
- Confirm which wave applies to you and whether the new thresholds keep you in or out of scope.
- If in scope, plan your DMA — it gates the whole report.
- Map existing data: most companies already have 60–70% of the data points across HR, finance, ops and EHS.
- Engage your auditor early — Q4 surprises kill timelines.
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