CSRD / ESRS
The Corporate Sustainability Reporting Directive (CSRD) is the EU law that makes ESG reporting mandatory for ~50,000 companies. The European Sustainability Reporting Standards (ESRS) are the technical disclosures CSRD requires.
Who is in scope
- Wave 1 (FY2024 reports, published 2025): EU public-interest entities already under NFRD with >500 employees.
- Wave 2 (FY2025): all other large EU companies meeting two of: >250 employees, >€50m turnover, >€25m balance sheet.
- Wave 3 (FY2026): listed SMEs (with opt-out until 2028).
- Wave 4 (FY2028): non-EU groups with >€150m EU turnover and a large EU subsidiary or branch.
- Note: the EU's 'Omnibus' simplification proposals may shift these thresholds — confirm with your auditor.
ESRS — the disclosure standards
- Cross-cutting: ESRS 1 (general principles), ESRS 2 (general disclosures).
- Environmental: E1 climate change, E2 pollution, E3 water and marine, E4 biodiversity, E5 resource use and circular economy.
- Social: S1 own workforce, S2 workers in value chain, S3 affected communities, S4 consumers and end-users.
- Governance: G1 business conduct.
Double materiality
CSRD requires a 'double materiality' assessment: report on topics that are financially material to the company AND topics where the company has a material impact on people or planet. Both directions matter.
Assurance
Reports must be subject to limited assurance from day one. The European Commission has the option to upgrade to reasonable assurance later. Auditors will work to ISAE 3000 / 3410 — they want a documented data trail, not just a number.
Format — Digital Tagging (XBRL)
CSRD reports must be filed in XHTML and digitally tagged with ESRS XBRL taxonomy so machines can read disclosures across the EU.
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