(Updated April 2026) The Corporate Sustainability Reporting Directive (CSRD) has undergone significant development since its adoption in 2022. While the original plans from 2024 envisioned broad inclusion of small and medium-sized enterprises (SMEs), the EU has, with the Amendment Policy 2026/470 (Omnibus I Package) sharpened the focus in February 2026 and massively raised the thresholds for reporting obligations.
Background to the CSRD reporting obligation
The new EU directive on sustainability reporting replaces the NFDR directive and is an important component of EU climate legislation with the aim of achieving climate neutrality by 2050. EU taxonomy it should offer greater transparency and comparability of the economic activities of all companies. This should ensure the flow of capital from private investors or financial companies towards an environmentally conscious and emission-free economy. The CSRDThe directive is therefore part of the EU's „Sustainable Finance“ legislative package. The reports must cover not only environmental aspects but also the areas of social responsibility, human rights, and governance of the respective company, and will subsequently be made publicly accessible.
Who is affected by the CSRD reporting obligation? The new thresholds from 2026
In the early phase (2024), it was planned to require companies with 250 employees or more to report. To reduce the bureaucratic burden for small and medium-sized enterprises, the following applies since Update in February 2026 new criteria.
Companies that meet at least two of the following three criteria are now subject to reporting:
- More than 1,000 employees (previously 250)
- Total assets higher than 225 million euros (adjusted value)
- Net sales over 450 million euros (previously €40 million)
For publicly traded SMEs, which are below these limits, the simplified LSME-Standard a listed SME, to secure capital market access without overwhelming the organization.
What content must be disclosed in the CSRD reports?
In addition to the areas that already had to be disclosed under the NFDR Directive (environmental, social, governance), sustainability reporting under CSRD now requires further information in the annual company report. This includes content on the taxonomy, business model with strategy and concept, supply chains, corporate goals, performance indicators, sustainable management, changes, handling opportunities and risks, decision-making processes and sector-specific information. All data must be collected and assessed within the company, which could be quite complicated and difficult due to the "double materiality". This means that external environmental impacts of the company's activities must also be assessed. All companies are also required to define targets and disclose their progress in the CSRD report.
Audit Requirements & Timings of CSRD Reporting Obligations
In contrast to previous EU reporting regulations, the entry into force of the CSRD directive now prohibits careless or negligent reports. They must be appended to the management report for the current fiscal year and are subject to audit by an independent service provider. All parties involved are subject to external certification requirements, and the statutory auditors' declaration, which has so far only related to financial reporting, will be extended to the CSRD sustainability report. Subsequently, they must be integrated into the management report and submitted in electronic format. Companies already covered by the NFDR directives will be required to begin data collection starting in 2026, allowing them to produce a CSRD-compliant report for the previous year in 2027.