Impact Assessment in the CSRD

The impact assessment in the CSRD is the exercise through which a company identifies, measures and prioritises the positive and negative effects that its activities and value chain have on the environment and society. It constitutes the impact dimension of the double materiality assessment required by the Corporate Sustainability Reporting Directive (CSRD) and is the starting point for deciding what information must be disclosed.

The CSRD and double materiality

The CSRD is the European Union regulation governing corporate sustainability reporting, replacing the former Non-Financial Reporting Directive (NFRD). Its technical content is set out in the European Sustainability Reporting Standards (ESRS).

The CSRD rests on the principle of double materiality, which requires analysing two perspectives:

• Impact materiality: the effects of the company on people and the planet (inside-out). This is the core of the impact assessment.
• Financial materiality: the risks and opportunities that sustainability issues create for the company itself (outside-in).

In practice, this exercise is organised around IROs (impacts, risks and opportunities). ESRS 2 (requirements IRO-1 and IRO-2) requires companies to document the process of identifying and assessing IROs and to justify, in an auditable manner, the thresholds and criteria applied; the ESRS do not set a single numerical threshold.

Who it applies to: changes from the Omnibus package

The scope of application of the CSRD has been substantially modified. Directive (EU) 2026/470 (Omnibus I simplification directive), published in the Official Journal of the EU on 26 February 2026 and in force since 18 March 2026, raises the thresholds: in general, only companies exceeding both 1,000 average employees and a net turnover of €450 million are required to comply. The Commission estimates this reduces the number of companies in scope by around 80–90%. Member States must transpose the directive by 19 March 2027 (provisions on the CSDDD are delayed until 26 July 2028).

It is worth noting that in April 2025 Directive (EU) 2025/794, known as the "stop the clock" directive, was adopted, postponing by two years the entry of the second and third waves of companies into the CSRD.

ESRS revision

The ESRS are being revised to simplify them: EFRAG's draft proposes cutting more than 60% of mandatory data points. The Commission must adopt the delegated act with the revised ESRS by 18 September 2026 at the latest, with application planned for the 2027 financial year and the possibility of early voluntary use in 2026. Until that act is adopted, the 2023 ESRS remain the legally binding reference.

The carbon footprint in the impact assessment

Climate is one of the most relevant impacts in most assessments. The thematic standard ESRS E1 (Climate Change) requires disclosure of greenhouse gas (GHG) emissions across three scopes:

• Scope 1: direct emissions from owned or controlled sources.
• Scope 2: indirect emissions from purchased electricity, heat or steam.
• Scope 3: all other indirect value chain emissions.

For quantification, the methodological reference is the GHG Protocol, on which companies base their carbon footprint calculations.

How to approach the assessment

1. Define the scope: own operations and value chain (upstream and downstream).
2. Identify IROs: map impacts, risks and opportunities by sustainability topic.
3. Assess and prioritise: apply severity and likelihood criteria and set justifiable thresholds.
4. Measure the carbon footprint and other relevant environmental and social indicators.
5. Report in accordance with the ESRS and subject the information to the required assurance.

A thorough impact assessment not only ensures compliance, but also helps anticipate risks, access sustainable finance and guide strategy. At Manglai we help companies measure their carbon footprint and prepare their sustainability information in line with the CSRD. Discover how Manglai can help you.