CSRD Disclosure Framework — Omnibus Thresholds, ESRS, India Relevance

Latest CSRD state — what changed by mid-2026

The EU’s Corporate Sustainability Reporting Directive (CSRD) is in the middle of a substantial structural simplification. The relevant primary instruments to track are:

Instrument	Adopted	Effect
Directive (EU) 2022/2464 (CSRD)	14 Dec 2022	Original CSRD — replaced the NFRD; introduced ESRS reporting, audit chain, XBRL tagging, double materiality
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 2026; in force 18 Mar 2026	Raised mandatory thresholds to >1,000 employees AND >€450M net turnover; third-country test raised to >€450M EU turnover + EU subsidiary or branch >€200M; FY starting on or after 1 Jan 2027; removed reasonable-assurance escalator; expanded value-chain cap
Revised ESRS Set 1 (delegated act draft)	6 May 2026 (EC consultation opened; closes 3 Jun 2026)	Reduces mandatory datapoints by >60%; clarifies materiality; applies FY 2027+; opt-in available for FY 2026

The combined practical effect: a much smaller population of entities is mandatorily in scope from FY 2027 than was originally contemplated in 2022; the assurance regime remains at limited level indefinitely; and the value-chain protection cap shields most SME suppliers from being indirectly drawn into CSRD-style data demands.

Scope under the post-Omnibus regime

Mandatory CSRD reporting applies to:

1. EU large undertakings meeting the new thresholds: more than 1,000 employees on average during the financial year AND net turnover above €450 million. Both limbs must be met. (Prior CSRD: 250 employees + €50M turnover OR €25M balance sheet OR a listed-entity carve-in — the Omnibus narrowed this to the cumulative employee + turnover test only.)
2. EU-listed entities meeting the same large-undertaking thresholds. Listed SMEs that would have been Wave 3 are no longer mandatorily in scope.
3. Non-EU parent groups (the “third-country undertaking” regime under CSRD Article 40a) whose consolidated EU operations exceed €450 million net turnover for two consecutive financial years AND have an EU subsidiary or branch with net turnover above €200 million. The €200M test is a flat threshold that applies to whichever EU presence the group has — there is no separate, lower threshold for branches. These groups produce a consolidated sustainability report at parent level using the future NESRS (expected EC adoption by 30 Jun 2026).

Wave 1 entities (those previously subject to the NFRD) that already reported for FY 2024 but now fall out of scope under the new thresholds receive a transition exemption from FY 2025 and FY 2026 reporting obligations.

The voluntary on-ramp for everyone else — including listed SMEs no longer mandatorily in scope, and non-listed entities below the thresholds — is the VSME standard, adopted by EC Recommendation on 30 July 2025.

The reporting standards — ESRS, Revised ESRS, NESRS, VSME

The reporting framework is multi-tier:

ESRS Set 1 — the original 12 standards adopted via Commission Delegated Regulation (EU) 2023/2772, published OJEU 22 Dec 2023:

• ESRS 1 (general requirements) + ESRS 2 (general disclosures) — cross-cutting
• Environmental: E1 Climate change, E2 Pollution, E3 Water and marine resources, E4 Biodiversity and ecosystems, E5 Resource use and circular economy
• Social: S1 Own workforce, S2 Workers in value chain, S3 Affected communities, S4 Consumers and end-users
• Governance: G1 Business conduct

Revised ESRS Set 1 — EC consultation draft published 6 May 2026 (consultation closes 3 Jun 2026). The draft retains the 12-standard architecture but reduces mandatory datapoints by more than 60% and total datapoints (mandatory + voluntary) by more than 70%, materially simplifies the double-materiality assessment process, and clarifies several disclosure requirements. Once adopted as a delegated act, the revised standards apply for financial years beginning on or after 1 Jan 2027, with an early-adoption option for FY 2026. According to EFRAG’s cost-benefit analysis, projected cumulative savings across in-scope undertakings are approximately €4.7 billion over 2027–2031, including value-chain effects.

NESRS (Non-EU Groups standard) — under CSRD Article 40a, the EC is mandated to adopt the NESRS by 30 June 2026. NESRS will be the standard a non-EU parent group uses to prepare the consolidated EU-operations sustainability report. Expected to be lighter than full ESRS — focused on EU-attributable activities and impacts. EFRAG’s research-phase output informed the draft.

VSME (Voluntary Standard for SMEs) — developed by EFRAG, adopted by EC Recommendation on 30 July 2025. Two tiers: a Basic Module for the smallest entities and a Comprehensive Module that captures additional information typically requested by lenders and large-customer supply chains. Critically, post-Omnibus, VSME also functions as a regulatory ceiling on what CSRD filers can demand from value-chain partners with fewer than 1,000 employees.

The value-chain cap — what it protects and what it does not

A long-running concern with the original CSRD was the “trickle-down” effect: large in-scope entities asking their entire supply chain — including small Indian or other non-EU suppliers — for sustainability data far beyond what those suppliers were legally required to report on their own.

Omnibus I substantially strengthens the value-chain cap. Member States are required to ensure that CSRD filers may not request sustainability information from any value-chain partner with fewer than 1,000 employees beyond:

1. Information specified in the VSME standard, AND
2. Additional sustainability information that is commonly shared between undertakings in the relevant sector.

This is a legal protection, not just a guideline. An Indian SME supplier to a German automotive OEM cannot be required (by the OEM, on the basis of the OEM’s own CSRD obligation) to provide datapoints that fall outside the VSME envelope — except for the narrow sector-typical exception.

The cap does not apply to:

• Value-chain partners with more than 1,000 employees (these are large entities for which the cap does not arise)
• Information requested for commercial reasons unrelated to the customer’s own CSRD reporting obligation
• Information separately required under sector-specific regulations (e.g., conflict-minerals rules, deforestation regulation)

For Indian SME suppliers, the practical effect is that the worst-case “CSRD-trickle-down” data-request burden has a defined ceiling — though customers in practice may still request additional data in commercial negotiations, those requests are no longer backed by the CSRD obligation.

Assurance — limited, indefinitely

CSRD sustainability statements are subject to limited assurance only. The Omnibus I revisions explicitly removed the original requirement for the Commission to assess the feasibility of transitioning to reasonable assurance and to adopt corresponding standards by 1 Oct 2028.

The practical implication:

• Reports continue to receive a negative-form assurance conclusion (“nothing has come to our attention that causes us to believe…”) rather than a positive opinion
• Procedures are materially lighter than for a reasonable-assurance engagement — internal control testing is typically risk-based and limited; substantive procedures rely heavily on analytical review + inquiry rather than direct corroboration
• Assurance providers must still meet the equivalent-to-statutory-auditor requirements under the Audit Directive (education, ethics, quality assurance)

Pending the EC’s binding limited-assurance standard, the operative reference for practitioners is the CEAOB Guidelines on Limited Assurance on Sustainability Reporting published 30 Sep 2024, which adapts ISAE 3000 (Revised) to the sustainability-reporting context.

Double materiality — the core ESRS framework concept

ESRS requires entities to apply double materiality: a sustainability matter must be disclosed if it meets either:

1. Impact materiality — the entity has actual or potential effects (positive or negative) on people or the environment over the short, medium, or long term, or
2. Financial materiality — the matter could reasonably be expected to affect the entity’s cash flows, development, performance, position, cost of capital or access to finance over the short, medium, or long term.

Either limb is sufficient — the disjunctive “either” is the key distinction from IFRS S1 / IFRS S2 (which uses financial materiality only) and from SEBI’s BRSR (which uses entity-level materiality assessment combined with a SEBI-prescribed BRSR Core mandatory-attribute list).

The Revised ESRS draft retains double materiality but clarifies and simplifies the assessment process, in particular reducing the documentation burden for matters that are clearly material or clearly immaterial.

How CSRD interacts with India’s BRSR, BRSR Core, and IFRS S2

Dimension	CSRD / ESRS	SEBI BRSR + BRSR Core	IFRS S1 / S2
Jurisdiction	EU (and third-country groups via NESRS)	Indian listed entities (top 1,000 mandatorily)	Voluntary global; adopted by individual jurisdictions
Materiality framework	Double (impact OR financial)	Entity assessment + SEBI mandatory-attribute list	Financial materiality
Standards	ESRS Set 1 (12 standards) → Revised ESRS Set 1	BRSR format Annexure II + BRSR Core 9 attributes	IFRS S1 + IFRS S2 + sector guidance
Assurance level	Limited only (indefinitely)	Reasonable for BRSR Core attributes (SAE 3000 / SAE 3410); voluntary for full BRSR	Defined by jurisdiction adopting
Reporting deadline	Annual sustainability statement alongside annual report	Annual filing under Reg 34(2)(f) LODR	Aligned with annual financial reporting
Scope 3	Mandatory across ESRS E1	Comply-or-explain for top 250 (FY 2024-25 onwards)	Required (S2) with relief provisions for first-year reporters

An Indian listed entity that is also a CSRD third-country parent has two parallel mandatory reporting obligations — BRSR at the listed-entity level and an NESRS consolidated EU-operations report. The underlying data (GHG inventory, workforce, water, waste) can be shared, but the disclosure structure, materiality framework, and assurance chain are separate. For entities additionally publishing voluntary IFRS S1 / S2 reports for global investor relations, the interoperability mapping between IFRS S2 and ESRS E1 is the practical reference.

What this means for Indian entities — three concrete cases

Case 1: Indian listed entity with one large EU subsidiary. If the subsidiary individually meets the >1,000-employee AND >€450M-turnover thresholds, that subsidiary must produce its own CSRD sustainability statement for the FY starting on or after 1 Jan 2027 (reports due 2028). The Indian parent’s BRSR at the consolidated listed-entity level continues independently under SEBI.

Case 2: Indian listed entity with consolidated EU operations exceeding €450M net turnover (for two consecutive financial years) AND an EU subsidiary or branch with >€200M net turnover. Once the NESRS is adopted (expected by 30 Jun 2026), the Indian parent group will be in scope for the third-country undertaking regime. The first reporting year for non-EU parents in scope is FY 2028 (reports due 2029). The consolidated EU-operations report covers EU-attributable activities and impacts; the Indian parent’s BRSR continues separately.

Case 3: Indian SME supplier to a large EU customer that is itself a CSRD filer. The Omnibus value-chain cap protects the supplier from being asked for sustainability data beyond what the VSME standard contains, except for sector-typical commonly-shared information. The supplier may voluntarily prepare a VSME report (Basic or Comprehensive Module) — which would also assist with lender requirements and ESG due diligence — but is not legally required to.

For listed Indian entities preparing for BRSR Core Assurance, the CSRD architecture is informative but not yet binding unless one of the three cases above applies. The data infrastructure that supports a robust BRSR Core engagement — documented GHG inventory boundary, evidence-tracked workforce data, water-and-waste registers, double-counting controls across operating entities — is also the data infrastructure that would support a future CSRD or NESRS engagement.

Implementation steps for an Indian entity newly in scope

For an Indian-headquartered group that determines it is in CSRD scope (typically via Case 1 or Case 2 above), the operational steps are:

1. Boundary determination — apply the operational-control / financial-control / equity-share boundary basis consistently between BRSR and CSRD; document the differences where the EU-operations boundary diverges from the listed-entity boundary.
2. Double-materiality assessment — conduct an impact-materiality + financial-materiality assessment per ESRS 1, including stakeholder engagement. The Revised ESRS draft simplifies the process but the dual-limb framework remains.
3. Datapoint mapping — identify which of the (post-revision) ESRS datapoints are mandatory based on the materiality outcome, and which are voluntary. The Revised ESRS reduces this universe substantially compared with the original ESRS Set 1.
4. Data infrastructure — extend the BRSR data infrastructure (Tally ledgers, payroll registers, environmental compliance returns, etc.) to capture EU-attributable data segregated by entity.
5. Assurance preparation — engage a CSRD assurance provider (must meet Audit Directive equivalence requirements); prepare the document and evidence package following CEAOB limited-assurance guidance.
6. XBRL tagging — the sustainability statement must be digitally tagged per the ESRS XBRL taxonomy; the practical mechanics mirror the BRSR XBRL filing experience.

How Batchwise fits

Batchwise coordinates BRSR Core Assurance for Indian listed entities through its partner CA firm network. Where an Indian listed entity is also a CSRD third-country parent (Case 2 above) or has an EU subsidiary individually in scope (Case 1), the BRSR engagement and the CSRD/NESRS engagement are separate workstreams — typically delivered by different assurance providers — but draw on a shared underlying data infrastructure. Batchwise’s ISAE 3410 GHG verification is the standard assurance route for the Scope 1+2 GHG inventory that anchors both BRSR Principle 6 disclosures and ESRS E1 climate disclosures.

For Indian SME suppliers (Case 3 above), the Omnibus value-chain cap eliminates the worst-case data-demand burden. Voluntary VSME reporting is a sensible step for any SME supplier whose EU customer relationships are material, both for protection (a published VSME report substantially reduces ad-hoc data requests) and for lender / investor engagement.

See also: TCFD Disclosure Framework for the predecessor climate-disclosure architecture that ESRS E1 substantially incorporates; GRI Disclosure Framework for the multi-stakeholder impact-materiality lineage shared with ESRS; EU CBAM glossary for the parallel embedded-emissions regime that touches the same underlying GHG-accounting discipline.