CSRD — Corporate Sustainability Reporting Directive
CSRD = EU Corporate Sustainability Reporting Directive; post-Omnibus I (Feb 2026) thresholds, ESRS reporting, limited assurance, India implications.
Definition
The Corporate Sustainability Reporting Directive (CSRD) — Directive (EU) 2022/2464 — is the European Union’s mandatory sustainability reporting regime. It replaced the prior Non-Financial Reporting Directive (NFRD) and substantially expanded the scope, depth, and assurance requirements of corporate sustainability disclosures across the EU. Reporting is done against the European Sustainability Reporting Standards (ESRS) issued by EFRAG and adopted by the European Commission.
CSRD has been substantially modified by two subsequent directives — the Stop-the-Clock Directive (EU) 2025/794 (in force 17 April 2025) and the Omnibus I Directive (EU) 2026/470 (published in OJEU 26 February 2026, in force 18 March 2026). The current state below reflects all three instruments together.
Recent regulatory timeline
| Instrument | Adopted | What it did |
|---|---|---|
| Directive (EU) 2022/2464 (CSRD) | 14 Dec 2022 | Replaced NFRD; introduced ESRS, audit chain, double materiality, XBRL tagging |
| Directive (EU) 2025/794 (Stop-the-Clock) | 17 Apr 2025 (in force) | Postponed Wave 2 to FY 2027 reporting (2028) and Wave 3 to FY 2028 reporting (2029); Wave 1 unaffected |
| Directive (EU) 2026/470 (Omnibus I) | 24 Feb 2026 (Council); OJEU 26 Feb; in force 18 Mar 2026 | Raised mandatory thresholds; removed reasonable-assurance escalator; strengthened value-chain cap |
Who is in scope after Omnibus I
Mandatory CSRD reporting now applies to:
- EU large undertakings and EU-listed entities with more than 1,000 employees AND net turnover above €450 million. Both limbs must be met. (Prior thresholds: 250 employees + €50M turnover OR €25M balance sheet OR listed-entity carve-in — all narrowed to the cumulative employee + turnover test only.)
- Non-EU parent groups (“third-country undertakings” under CSRD Article 40a) whose consolidated EU operations exceed €450M net turnover for two consecutive financial years AND have an EU subsidiary or branch with net turnover above €200M. The €200M test is a flat threshold for whichever EU presence the group has — no separate lower branch threshold.
The change applies for financial years beginning on or after 1 January 2027. Wave 1 entities (already reporting under CSRD for FY 2024) that fall out of scope under the new thresholds receive a transition exemption from FY 2025 + FY 2026 obligations.
The voluntary on-ramp for everyone else — including listed SMEs no longer in scope, and non-listed entities below thresholds — is the VSME standard, adopted by EC Recommendation on 30 July 2025.
Reporting standards
Reporting is done against:
- ESRS Set 1 — 12 standards adopted via Commission Delegated Regulation (EU) 2023/2772 (22 Dec 2023): ESRS 1 (general requirements), ESRS 2 (general disclosures), 5 environmental (E1-E5), 4 social (S1-S4), 1 governance (G1)
- Revised ESRS Set 1 — EC consultation draft published 6 May 2026 (consultation closed 3 Jun 2026); reduces mandatory datapoints by >60%; applies FY 2027+ with FY 2026 opt-in
- NESRS — the standard for non-EU groups under Article 40a; expected EC adoption by 30 June 2026
- VSME — voluntary SME standard; also functions as the regulatory ceiling for what CSRD filers can demand from value-chain partners with fewer than 1,000 employees
The disclosure framework uses double materiality — a matter must be disclosed if it has either impact materiality (effects on people / environment) OR financial materiality (effects on the entity’s cash flows, performance, financing).
Assurance — limited only, indefinitely
CSRD sustainability statements are subject to limited assurance. The original CSRD architecture required the Commission to assess feasibility of transitioning to reasonable assurance by 1 Oct 2028 and to adopt corresponding standards. Omnibus I removed that obligation — limited assurance remains the only mandatory level indefinitely.
Pending the EC’s binding limited-assurance standard, practitioners reference the CEAOB Guidelines on Limited Assurance on Sustainability Reporting (Sep 2024), which adapt ISAE 3000 (Revised) to the sustainability context.
India relevance
Three concrete cases:
- Indian listed entity with one large EU subsidiary that individually meets the >1,000-employee + >€450M-turnover thresholds. The subsidiary must produce its own CSRD sustainability statement for FY starting on or after 1 Jan 2027.
- Indian parent group with consolidated EU operations >€450M net turnover (2 consecutive years) AND an EU subsidiary or branch with >€200M net turnover. The Indian parent group is in scope for the third-country undertaking regime; first reporting under NESRS for FY 2028 (reports due 2029).
- Indian SME suppliers to in-scope EU customers. Protected by the Omnibus value-chain cap from being asked for data beyond the VSME standard contents (except sector-typical commonly-shared information).
The Indian parent’s BRSR at the listed-entity level under SEBI continues independently in all three cases.
CSRD vs SEBI BRSR
| Aspect | CSRD / ESRS | SEBI BRSR + BRSR Core |
|---|---|---|
| Jurisdiction | EU (and third-country groups via NESRS) | Indian listed entities (top 1,000) |
| Materiality | Double (impact OR financial) | Entity assessment + SEBI mandatory-attribute list |
| Standards | ESRS Set 1 → Revised ESRS Set 1 | BRSR format Annexure II + BRSR Core 9 attributes |
| Assurance | Limited only (indefinitely) | Reasonable assurance for BRSR Core attributes (SAE 3000 / SAE 3410); voluntary for full BRSR |
| Scope 3 | Mandatory across ESRS E1 | Comply-or-explain for top 250 (FY 2024-25 onwards) |
Related terms
- CSRD Disclosure Framework — Omnibus thresholds, ESRS, India relevance — the practical implementation page (timeline detail, India-relevance cases, ESRS architecture, BRSR mapping)
- ESRS — the European Sustainability Reporting Standards used to comply with CSRD
- Double materiality — the dual-limb framework underpinning ESRS disclosure scope
- IFRS S2 — the investor-materiality counterpart that interoperates with ESRS E1 on climate
- TCFD — the predecessor climate-disclosure architecture inherited by ESRS E1 and IFRS S2
- BRSR — India’s parallel mandatory listed-entity sustainability reporting framework
- BRSR Core — the India-mandatory reasonable-assurance scope
- CBAM — the parallel EU regime on embedded-emissions carbon pricing
- Assessment vs assurance — the distinction between limited (CSRD) and reasonable (BRSR Core) assurance levels