The Corporate Sustainability Reporting Directive (CSRD, Directive (EU) 2022/2464) requires undertakings to prepare standardised sustainability reporting in accordance with the European Sustainability Reporting Standards (ESRS). It massively expands the previous NFRD (Non-Financial Reporting Directive): instead of ~11,700 undertakings, approximately ~50,000 EU undertakings will be subject to reporting obligations. Timeline: capital markets-oriented undertakings report for financial year 2024 (publication 2025); large undertakings (250+ employees + turnover > €50 million or balance sheet > €25 million) for 2025 (2026); capital markets-oriented SMEs for 2026 (2027) with opt-out until 2028; non-EU groups with ≥ €150 million EU turnover for 2028 (2029). The CSRD was partially postponed and simplified through the Commission's Omnibus Package (February 2025) — final version expected 2026 in trilogue. German implementation: draft CSRD Implementation Act July 2024, adoption still pending (as of July 2026). Audit obligation: statutory auditor (limited assurance initially, reasonable assurance planned from 2028).
| Item | Value |
|---|---|
| Legal Basis | Directive (EU) 2022/2464 of 14 December 2022 |
| Implementation Standards | European Sustainability Reporting Standards (ESRS) |
| Current ESRS Count | 12 cross-sector standards (2 cross-cutting + 10 thematic) |
| Cross-Cutting | ESRS 1 (General Requirements), ESRS 2 (General Disclosures) |
| Thematic Standards | E1-E5 (Environment), S1-S4 (Social), G1 (Governance) |
| Materiality Principle | Double materiality (financial + impact) |
| "Large Undertaking" Thresholds | 2 of 3: 250+ employees, > €50m turnover, > €25m balance sheet |
| Capital Markets-Oriented Since 2024 (Reporting Year) | All EU-listed undertakings |
| Large Undertakings Since 2025 (Reporting Year) | – (postponed in Omnibus Package Feb 2025) |
| Omnibus Simplification | Reduction to ~20 % of original obligation |
| SMEs (Capital Markets-Oriented) from 2026 (Reporting Year) | Opt-out possible until 2028 |
| Third-Country Groups from 2028 | ≥ €150m EU net turnover + EU subsidiary/branch |
| Report as Part of Management Report | Yes – ESEF format (XBRL-tagged) |
| Audit by Statutory Auditor | Limited assurance (initially), reasonable assurance from 2028 (planned) |
| German Implementation | CSRD Implementation Act (draft 07/2024, pending) |
| Penalty for Non-Reporting | Fine per Section 334 HGB / national law (up to €10m or similar) |
| EFRAG | European Financial Reporting Advisory Group (develops ESRS) |
The CSRD applies in stages to four undertaking groups:
1. Capital markets-oriented undertakings (listed, bond issuers) — reporting year 2024, publication 2025
2. Large undertakings (250+ employees + €50m turnover or €25m balance sheet) — reporting year 2025, publication 2026 — postponed in Omnibus to 2027
3. Capital markets-oriented SMEs — reporting year 2026, publication 2027, opt-out until 2028
4. Non-EU groups with ≥ €150m EU net turnover and EU subsidiary/branch — reporting year 2028, publication 2029
Omnibus Package 02/2025 postponed the reporting obligation for Group 2 (large undertakings) to 2027 and significantly reduced the scope. Details being finalised in 2026 trilogue.
Cross-Cutting (General):
Environment:
Social:
Governance:
The CSRD prescribes double materiality:
A topic must be material from one of the two perspectives to be subject to reporting. Non-material topics may be omitted ("comply or explain") — with detailed reasoning.
Step 1 — Assess applicability. Check thresholds + timeline. Am I in Group 1, 2, 3, or 4?
Step 2 — Conduct materiality assessment. Evaluate all 12 ESRS topics, involve stakeholders (customers, employees, NGOs, investors, suppliers). Documentation mandatory.
Step 3 — Set up data collection. Systematic ESG data capture (emissions, water use, diversity, supplier compliance). Often: new reporting tool required.
Step 4 — Write report. In ESRS structure, in ESEF format (XBRL-tagged) as part of the management report.
Step 5 — Engage statutory auditor for limited assurance audit.
Step 6 — Publish in commercial register + own website (management report).