CSRD scope narrowed by Omnibus I; second wave reports from financial year 2027

The Corporate Sustainability Reporting Directive (CSRD) (external site) requires companies to publish yearly information on sustainability matters, prepared under the European Sustainability Reporting Standards (ESRS). Investors, lenders and the public use it to see how a company affects people and the environment, and how sustainability risks affect the company.

Directive (EU) 2026/470 narrows the list of companies required to report and fixes when the second group starts (Directive (EU) 2026/470 (external site)).

Before the change, the CSRD reached large undertakings and listed small and medium-sized companies in successive waves, starting with financial year 2024 (EUR-Lex (external site)).

Now individual reporting is limited to undertakings with more than 1,000 employees on average and a net turnover above EUR 450 million (Directive (EU) 2026/470 (external site)). For groups based outside the EU, the test is EUR 450 million of EU turnover for the parent and EUR 200 million for the subsidiary or branch (Council of the EU (external site)).

As an example, a company with 800 employees and EUR 600 million of turnover was a large undertaking under the earlier rules and is now outside the scope. The Commission estimates that the number of companies in scope falls by about 85 percent (Commission staff document (external site)).

Companies with up to 1,000 employees in the value chain of a reporting company may decline requests for information beyond the voluntary standard for small and medium-sized enterprises (VSME) (Council of the EU (external site)).

The standards are shorter as well. Delegated Regulation (EU) 2026/1563 revises the ESRS, reduces the number of datapoints and separates mandatory from voluntary ones (EUR-Lex (external site)).

Banks, insurers, asset managers and listed companies are in scope only above both thresholds; undertakings below them leave the scope from financial year 2027 (Directive (EU) 2026/470 (external site)).

An ESG Reporting Specialist prepares the statement under the revised ESRS. A Group Reporting Accountant re-checks which group entities report at individual level (EUR-Lex (external site)).

A Sustainable Finance Analyst and an ESG Research Analyst work with data from fewer reporting companies (Commission staff document (external site)).

A Data Governance Analyst maps a smaller set of reported data: the revised standards cut mandatory datapoints by more than 60 percent (European Commission (external site)).

For External Audit (Financial Services), assurance work follows the limited assurance standards that the Commission is due to adopt by 1 July 2027 under the amended Audit Directive (EUR-Lex (external site)).

Directive (EU) 2025/794 of April 2025 postponed the second and third waves by two years (EUR-Lex (external site)). Directive (EU) 2026/470 entered into force on 18 March 2026 (European Commission (external site)).

Member States transpose the CSRD changes by 19 March 2027 (EUR-Lex (external site)). The revised ESRS were adopted on 3 July 2026. For financial years starting in 2026, companies may apply either the earlier standards or the new ones (EUR-Lex (external site)).

Large undertakings of the second wave report for financial years starting on or after 1 January 2027. First-wave undertakings outside the new thresholds leave the scope from the same date, and Member States may exempt them for financial years 2025 and 2026 (Directive (EU) 2026/470 (external site)). These dates are confirmed.

The CSRD, Directive (EU) 2022/2464, works through the Accounting Directive 2013/34/EU and the Audit Directive 2006/43/EC, which Directive (EU) 2026/470 also amends (EUR-Lex (external site)). Reporting started with financial year 2024 for the first wave (EUR-Lex (external site)).

In February 2025 the Commission proposed the simplification package that led to the current text, after the stop-the-clock directive had already moved the later waves (EUR-Lex (external site)).