What does CSRD mean for my organization?

The Corporate Sustainability Reporting Directive (CSRD) is EU legislation that requires large companies to publicly disclose detailed information about their environmental, social, and governance (ESG) impacts and risks. Whether it applies to your organization depends on your size, and following a significant update in 2026, the scope is now considerably narrower than it was originally designed to be. Below, we unpack the key questions your organization is likely asking right now.

Who does CSRD actually apply to?

Following the adoption of Directive (EU) 2026/470 (known as Omnibus I), CSRD now applies to companies with more than 1,000 employees and a net turnover exceeding €450 million. Both thresholds must be met, and this change dramatically reduced the number of companies in scope, with roughly 80% of previously covered businesses no longer subject to mandatory reporting obligations.

The previous thresholds — which covered companies with 250 or more employees, €50 million in turnover, or €25 million on the balance sheet — have been removed. The revised scope focuses mandatory reporting on the largest companies, which are generally considered both the most impactful and the most capable of absorbing reporting costs.

If your organization falls below the new thresholds, you are not legally required to report under CSRD. That said, you may still face indirect pressure, since large companies subject to CSRD cannot require businesses in their value chains to provide more sustainability information than is covered by the voluntary reporting standard introduced alongside the directive. So if you are a supplier to a large CSRD-obligated company, the value chain cap protects you from excessive data requests, though some level of sustainability disclosure may still be expected. Understanding what reporting actually entails — and what it demands of in-scope companies — is the natural next step.

What does CSRD require companies to report on?

CSRD requires in-scope companies to report on their sustainability-related risks and opportunities, as well as their impacts on people and the environment. Reporting must follow the European Sustainability Reporting Standards (ESRS), which cover environmental, social, and governance topics, including climate change, biodiversity, and human rights.

The ESRS were significantly revised in July 2026. The European Commission adopted an updated version of the standards that reduces the number of mandatory data points by more than 60%, and the total number of data points by more than 70%, which is expected to cut reporting costs per company by over 30%. The revised standards are shorter, clearer, and introduce new flexibilities compared to the original Set 1 ESRS.

It is also worth noting that the requirement to establish and implement a climate transition plan has been fully removed from CSRD under the Omnibus changes — a significant obligation in the original framework whose removal meaningfully reduces the scope of what is required.

One important caveat: as of mid-2026, the revised ESRS have been adopted by the European Commission but are still subject to scrutiny by the European Parliament and the Council. Until the scrutiny period concludes, these changes are not yet final, so organizations should monitor developments closely and plan with this uncertainty in mind. Central to how those reporting requirements are applied in practice is a concept that sits at the heart of the entire CSRD framework: double materiality.

What is double materiality and why does it matter for CSRD?

Double materiality is the principle that companies must assess and report on sustainability topics from two angles: how sustainability issues affect the company financially (financial materiality), and how the company’s activities affect people and the environment (impact materiality). CSRD requires both perspectives, which is what makes it more demanding than many other reporting frameworks.

This dual lens shapes everything from how a company identifies which topics to report on to what data it needs to collect. A topic is considered material under CSRD if it is significant from either direction — not only if it poses a financial risk to the business.

In practice, conducting a double materiality assessment (DMA) requires a structured process of stakeholder engagement, impact analysis, and risk evaluation across your value chain. The revised ESRS have also updated the approach to gross versus net impacts within the DMA, clarifying how companies should account for mitigation and prevention actions when assessing the severity of impacts.

Getting the DMA right matters because it determines the scope of everything else you report. If you underestimate what is material, you risk non-compliance; if you overestimate, you create unnecessary reporting burden. It is genuinely one of the areas where specialist expertise in CSRD reporting makes the most meaningful difference. Before investing in that process, however, it is equally important to understand exactly when these obligations kick in.

When do CSRD reporting deadlines apply?

Under the revised rules, the updated CSRD scope — meaning companies with more than 1,000 employees and over €450 million in turnover — applies to financial years starting on or after 1 January 2027, meaning the first reports under the updated framework would be published in 2028. Member States are required to transpose the new rules into national law by 19 March 2027.

For companies that were already reporting under the original Wave 1 rules (large public-interest entities that began reporting on the 2024 financial year), a transitional arrangement exists. Member States may exempt these companies from reporting obligations for financial years 2025 and 2026 if they now fall below the revised thresholds.

The broader timeline reflects how substantially the CSRD landscape has shifted since the directive was first introduced. If you were previously preparing for compliance under the old thresholds, it is worth reassessing your position under the new rules before investing further in reporting infrastructure. To fully appreciate how far the framework has evolved, it helps to look at what came before it.

How does CSRD differ from the previous NFRD?

CSRD replaces the Non-Financial Reporting Directive (NFRD), which was the previous EU framework for corporate sustainability disclosure. The most significant differences lie in scope, depth, and standardization: NFRD covered around 11,000 large public-interest entities, while CSRD — even in its revised form — introduces far more detailed and standardized reporting requirements.

Under NFRD, companies had considerable flexibility in what they reported and how, which led to inconsistent, often hard-to-compare disclosures. CSRD addresses this by mandating reporting against the ESRS, which set specific data points, disclosure requirements, and methodologies, making sustainability information more comparable across companies of similar size and industry — and more useful for investors, regulators, and other stakeholders.

CSRD also introduces the double materiality requirement described above, which NFRD did not mandate in the same structured way. Unlike NFRD, CSRD requires sustainability information to be included in the management report and to be subject to third-party assurance, adding a layer of accountability that was largely absent before.

In short, CSRD represents a significant increase in ambition and rigor, even after the Omnibus simplifications. If your organization reported under NFRD, you will recognize some of the underlying concepts, but the level of detail and structure required under CSRD is meaningfully higher — which makes thoughtful, early preparation all the more important.

How should an organization prepare for CSRD compliance?

Preparing for CSRD compliance starts with confirming whether your organization falls within scope under the updated thresholds, then working backward from the reporting deadline to build the necessary processes, data infrastructure, and internal governance. The earlier preparation begins, the more manageable the process tends to be.

Here are the core steps most organizations need to work through:

• Confirm your scope: Assess whether you meet both thresholds (more than 1,000 employees and over €450 million net turnover) for financial years starting on or after 1 January 2027. Also check whether your Member State has adopted transitional exemptions for earlier reporting years.
• Conduct a double materiality assessment: This is the foundation of your CSRD report. It determines which sustainability topics are relevant to your organization and must be reported on, and it requires structured stakeholder input and impact analysis across your operations and value chain.
• Map your data gaps: Once you have identified which ESRS topics are material, you can determine what data you currently collect, what is missing, and what systems or processes you need to put in place to gather it reliably.
• Align internal governance: CSRD reporting is not solely a sustainability team responsibility. Finance, legal, operations, and HR all have a role to play, and establishing clear ownership and cross-functional collaboration early prevents bottlenecks later in the process.
• Prepare for assurance: CSRD requires third-party assurance of sustainability information. Understanding what assurance providers will look for — and ensuring your data and documentation meet that standard — is an important part of preparation.
• Monitor the revised ESRS: Since the updated standards are still under parliamentary scrutiny as of mid-2026, keep a close eye on when they are finalized. Your reporting approach may need to be adjusted once the confirmed version is published.

Taken together, these steps form a compliance journey that touches nearly every part of an organization. The double materiality assessment and data gap analysis tend to be the most time-intensive, and both benefit considerably from specialist input.

The governance piece is often underestimated, yet it is critical for making reporting sustainable year over year, rather than a one-time effort carried out under pressure. That is precisely where having the right expertise alongside you can make all the difference.

Ready to tackle CSRD with the right expertise?

CSRD compliance is a serious undertaking, and the regulatory landscape is still evolving. Having the right expertise in your corner — whether for the double materiality assessment, ESRS gap analysis, or reporting itself — can make the difference between a process that runs smoothly and one that does not.

At Dazzle, we connect organizations with pre-screened sustainability freelancers who specialize in exactly this kind of work. Whether you need a CSRD reporting expert for a focused project or an interim specialist to guide your team through the full compliance process, we can match you with the right person within 48 hours. No lengthy procurement processes, no unnecessary overhead, just the right expertise when you need it. Get in touch and let’s figure out the best fit for your situation.