The CSRD (Corporate Sustainability Reporting Directive) is the European directive that requires companies to report on their impact on people and the environment. It replaced the older Non-Financial Reporting Directive (NFRD) and expanded sustainability reporting considerably. Since the Omnibus simplification package of 2025 and 2026, though, both the scope and the timeline have been adjusted: fewer companies are directly obliged, and many deadlines have been pushed back.
Who is this for? Two groups, and the distinction matters more than it used to. Large undertakings that now fall within the narrowed scope and have to report. And the far larger group that no longer does, but is asked for sustainability data by customers, suppliers or banks that do. If you are in the second group, nothing here is an obligation for you, but most of it will still land on your desk through the supply chain.
Looking for something more specific? If you want the framework behind the reporting rather than the directive itself, read what ESG is and how to produce a report in six steps. Want to know straight away whether this applies to you? Go to the worked example.
Table of contents
What is the CSRD?
The CSRD obliges companies to report in a structured way on sustainability themes such as carbon emissions, energy consumption, working conditions, diversity and transparency in the supply chain. The reporting follows the ESG pillars (Environmental, Social and Governance) and the European Sustainability Reporting Standards (ESRS). Where the old NFRD touched only the very largest companies, the CSRD went much wider, although the Omnibus package has since pared that back again.
Who does the CSRD apply to?
Where this stands in 2026: since the Omnibus package there are new, higher thresholds and the CSRD is aimed mainly at the largest undertakings. In short:
- The new threshold: more than 1,000 employees and more than 450 million euro in turnover. That is a cumulative requirement; the old two-out-of-three rule has been dropped.
- Large listed companies that were already covered by the NFRD have been reporting since 2025 and continue to do so as long as they stay above the thresholds.
- Other large undertakings newly coming into scope report for the first time in 2028, over financial year 2027. That is a two-year postponement.
- Listed small and medium-sized companies fall largely outside the mandatory scope. For them there is the voluntary VSME standard.
For many companies 2026 is therefore a year of preparation and planning rather than reporting. Always check the current position, because implementation still differs per EU member state.
Does it apply to you? Two examples
Because the two criteria are cumulative, size on one measure alone decides nothing. Two organisations by way of illustration:
| Organisation A | Organisation B | |
| Employees | 1,200 | 900 |
| Turnover | € 600 million | € 700 million |
| Above 1,000 employees? | yes | no |
| Above € 450 million? | yes | yes |
| Within CSRD scope | yes | no |
Organisation B has the higher turnover of the two and still sits outside the scope, because it does not pass the employee threshold. That does not make it irrelevant to B: if B supplies A, then A needs B’s figures for its own value-chain reporting. Check your own position with your accountant, since additional rules apply to groups and to listed companies.
What do you have to report?
The CSRD works on the principle of double materiality: you describe both how your company affects people and the environment, and how sustainability themes affect your company. In concrete terms you report on energy and raw material use, your carbon footprint, working conditions and diversity, risk management and governance, and transparency in the supply chain. The reporting process itself, in six steps, is set out in our article on ESG and ESG reporting.
What does the CSRD mean for smaller companies?
Good news for a lot of smaller businesses: the higher Omnibus thresholds mean you are probably no longer directly obliged to report. The CSRD still reaches you indirectly, though. Large customers, suppliers and banks that do have to report will ask you to supply sustainability information for their own chain. Whoever has that data in order is the more attractive partner, and for companies outside the mandatory scope there is now a lighter route as well: the voluntary VSME standard, designed so that a smaller company can answer those questions without building a full CSRD report.
Three misconceptions about the CSRD
- “The CSRD has been scrapped.” It has not. Omnibus narrowed the scope and delayed the deadlines; the directive itself, and the reporting obligation for the largest companies, remain in force.
- “We are too small, so it does not concern us.” Formally true, practically often not. The obligation travels down the supply chain in the form of questionnaires from customers and financiers.
- “It is a chapter in the annual report.” It is a data exercise before it is a writing exercise. Figures have to be measurable, comparable between years and traceable to a source, which is a matter of systems rather than wording.
The CSRD and your administration
Every form of reporting starts with reliable data. TriFact365 is not a CSRD or sustainability tool, but it does deliver a digitised, current administration: our self-learning AI recognises your invoices and prepares them as a booking proposal for your accounting package. That clean source data is the basis under any report, and a paperless way of working contributes to the E of ESG as well. It also answers the third misconception above, because a figure that traces back to a source document is the part auditors ask about. See how processing incoming invoices digitises your administration.
Frequently asked questions
The CSRD (Corporate Sustainability Reporting Directive) is the European directive requiring companies to report on their impact on people and the environment, following the ESG pillars and the ESRS standards. It replaced the older NFRD.
Mainly large undertakings with more than 1,000 employees and more than 450 million euro in turnover. Both criteria have to be met, so many companies and listed SMEs now fall outside the mandatory scope.
Large listed companies have been reporting since 2025. Other large undertakings newly in scope report for the first time in 2028, over financial year 2027. For many companies 2026 is a planning year.
No. The Omnibus package narrowed the scope and postponed the deadlines, but the directive remains in force and the largest companies still have to report.
A voluntary reporting standard for smaller companies that fall outside the CSRD but are asked for sustainability data by customers or financiers. It is lighter than a full CSRD report.
Double materiality means you report both on how your company affects people and the environment, and on how sustainability themes affect your company. Both perspectives are required under the CSRD.
TriFact365 is not a CSRD tool, but it provides a digitised, current administration with reliable source data. That data is the basis under any report, and paperless working contributes to the E of ESG.
In closing
The CSRD is not a passing trend but a structural change in how companies report, even though the Omnibus package has pared back its introduction. If you fall outside the mandatory scope, the demand for sustainability data from your supply chain will keep growing anyway. Working on transparency now, with a tightly digitised administration behind it, is what builds an organisation that is ready for it.
