CSRD directive: key points and requirements

The Corporate Sustainability Reporting Directive (CSRD) marks a turning point in the way European companies are required to report sustainability-related information.

Since the original publication of this article, the regulatory framework has evolved significantly, particularly following the Omnibus proposals of February 2025 and the updated implementation timeline.

In this article, you will find the key updates, which companies are affected, and how to prepare to comply with the CSRD under the new timeline, with a specific focus on companies that will be required to report for the first time for the 2027 financial year.

What is the CSRD Directive?

The CSRD expands and strengthens the former Non-Financial Reporting Directive (NFRD) with a clear objective: to improve the quality, comparability, and reliability of the ESG information disclosed by companies.

Unlike the previous framework, the CSRD:

• Integrates sustainability into the management report alongside financial information.
• Introduces external assurance requirements.
• Requires the use of common standards (ESRS).
• Mandates the application of the double materiality principle.

Sustainability therefore ceases to be a narrative exercise and becomes a structured reporting system, with strategic, financial, and operational implications.

Which companies are required to report under the CSRD?

New timeline and the concept of “waves”

Following the approval of the so-called stop-the-clock directive, the CSRD implementation timeline has been adjusted:

• Wave 1: Large companies already subject to the NFRD, publishing their first CSRD report in 2025 (for financial year 2024).
• Wave 2: Large companies not previously covered by the NFRD.
  • They were initially required to report in 2026.
  • With the approved delay, they will report in 2028, covering the 2027 financial year.
• Wave 3: Listed SMEs and other entities, also subject to a two-year delay.

New proposed thresholds

According to the Omnibus proposal (still pending final approval at EU level), the CSRD scope would include companies that meet:

• More than 1,000 employees, and
• At least one of the following financial criteria:
  • More than €50 million in turnover, or
  • More than €25 million in total assets (balance sheet).

This adjustment significantly reduces the number of companies required to comply, but it does not remove the obligation for large organizations.

What are the delegated acts of the CSRD?

Since its approval on December 14, 2022, the European Commission has adopted several delegated acts defining the European Sustainability Reporting Standards (ESRS), mandatory for all companies subject to the CSRD.

These delegated acts are organized into two main annexes:

1. Annex I: European Sustainability Reporting Standards (ESRS)

This annex outlines specific standards companies must follow when preparing sustainability reports. It is divided into two categories:

Cross-cutting standards:

• ESRS 1: General reporting requirements: Principles for sustainability reporting, including scope, materiality, and data quality.
• ESRS 2: General disclosures: General company information and sustainability strategy.

Environmental, social, and governance (ESG) standards:

• Environmental:
  • ESRS E1: Climate change
  • ESRS E2: Pollution
  • ESRS E3: Water and marine resources
  • ESRS E4: Biodiversity and ecosystems
  • ESRS E5: Resource use and circular economy
• Social:
  • ESRS S1: Own workforce
  • ESRS S2: Workers in the value chain
  • ESRS S3: Communities affected by business activities
  • ESRS S4: Consumers and end users
• Governance:
  • ESRS G1: Business conduct, including ethics, anti-corruption measures, and respect for human rights.

2. Annex II: Glossary

This annex provides precise definitions of terms used in the ESRS, ensuring consistent interpretation of reporting requirements.

Preparing and verifying sustainability reports with Manglai

At Manglai, as experts in emissions measurement following the GHG Protocol and ISO 14064, we offer comprehensive solutions to help businesses comply with the CSRD requirements:

• Measure carbon footprints: Precisely calculate emissions across scopes 1, 2, and 3.
• Identify emission reduction measures: Use data analysis and personalized recommendations.
• Prepare auditable sustainability reports: Ensure compliance with international standards.
• Communicate sustainability strategies: Share transparent and effective information with stakeholders.

Frequently asked questions

What does CSRD stand for?‍

CSRD stands for Corporate Sustainability Reporting Directive.

When does the CSRD come into effect?

• January 1, 2024: For companies already subject to previous regulations.
• January 1, 2025: For companies not covered by the previous directive.
• January 1, 2026: For listed SMEs.

What is the goal of the CSRD?‍

The CSRD aims to improve transparency and comparability of non-financial information, supporting the transition to a more environmentally sustainable economy.