CSRD · Corporate Sustainability Reporting Directive · ESRS
CSRD reporting consulting for a sustainability statement your assurance provider can sign.
Build a CSRD reporting programme that produces a sustainability statement under the ESRS: a double materiality assessment that holds up to questioning, data points with owners and controls, and disclosures your assurance provider can test. Sterling's expert and experienced consultants design the programme with your finance, sustainability and operations teams, prepare the evidence and stay with you after the first report, in 60+ countries. We ensure a successful CSRD reporting programme for our clients.
- Fixed scope, one proposal: consulting, Effivity software, Sterling Academy access and internal auditor training, as applicable to your standard, in one proposal
- A team of expert and experienced sustainability reporting consultants, advising on management systems across sectors and countries since 2003
- The Sterling Promise: 100% on-time completion, 100% success, 8,100+ client engagements. Sterling prepares the report and the evidence; the assurance provider decides
8,100+ client engagements in 60+ countries.
CSRD client experience
What it is
What are the CSRD and the ESRS, and what do they require?
The Corporate Sustainability Reporting Directive is the European Union's law on how companies report their sustainability performance. Directive (EU) 2022/2464 amended the EU's accounting, transparency and audit rules so that companies in scope publish a sustainability statement in a dedicated section of the management report, prepared under the European Sustainability Reporting Standards (ESRS), delegated acts the Commission adopts on EFRAG's technical advice. The statement covers what sustainability matters do to the company's cash flows, financing and value (financial materiality) and what the company does to people and the environment across its operations and value chain (impact materiality); a matter is reported if material from either perspective. An assurance provider then examines the statement and gives a limited assurance conclusion.
There is no CSRD certificate. What exists at the end is an assured statement and the process behind it: a materiality assessment with its reasoning, a data inventory in which every figure has an owner, a method and a control, policies, actions and targets per material topic, and evidence the assurance provider can test.
Current text. The directive applied first to financial year 2024 and has been amended twice. Directive (EU) 2025/794 of 14 April 2025 ("stop-the-clock") postponed the second and third waves of companies by two years. Directive (EU) 2026/470 of 24 February 2026, the Omnibus I content directive, entered into force on 18 March 2026, with a year for Member States to transpose it: from financial years starting on or after 1 January 2027 the obligation applies only to undertakings exceeding 1,000 employees and €450 million net turnover, listed companies below those thresholds drop out, the thresholds for non-EU groups rise, sector-specific standards and the planned move to reasonable assurance are removed, and a value chain cap protects smaller suppliers. Delegated Regulation (EU) 2023/2772 remains the ESRS in force; the Commission adopted the simplified ESRS on 3 July 2026 for financial years beginning on or after 1 January 2027, subject to Parliament and Council scrutiny and publication in the Official Journal, not completed when this page was written. National transposition can differ in timing and detail: confirm your wave and scope with your auditor or legal adviser.
Who it is for
Who needs to comply with the CSRD?
Scope follows size and establishment, and after the 2026 amendments it is narrower than most companies planned for. Nothing on this page is legal advice; national law is what your auditor applies. Organisations come to Sterling from four starting points:
- You are a large EU company or group above the new thresholds. More than 1,000 employees and €450 million net turnover means a first sustainability statement for the financial year starting in 2027, published in 2028, prepared under the simplified ESRS and assured.
- You have reported since financial year 2024 and the ground is moving. First-wave companies keep reporting under the current ESRS with the 2025 quick-fix reliefs, then move to the simplified set. Those below the new thresholds may be exempted by their Member State for 2025 and 2026.
- You are a non-EU group with a large European footprint. A group generating more than €450 million net turnover in the EU, with a subsidiary or branch above €200 million, falls under the third-country regime, which the directive as enacted applies from financial years starting in 2028.
- You supply a company that reports. Customers in scope need value chain data on emissions, workers and business conduct. The value chain cap means they cannot demand more from a supplier with fewer than 1,000 employees than the voluntary standard covers; a supplier that can answer it keeps the contract.
Business benefits
How CSRD reporting supports financing, customers and control
A reporting programme pays for itself where sustainability meets money: a lender's questionnaire, a tender that scores emissions, an assurance finding, a board asking about the net-zero target.
- Financing on better termsBanks and investors screening under the EU's sustainable finance rules get assured, comparable data instead of a narrative, which shortens due diligence.
- Tenders you can answerScope 1, 2 and 3 figures, workforce metrics and business conduct disclosures ready in the format large customers and public buyers score.
- A materiality assessment the board ownsImpacts, risks and opportunities ranked with evidence and signed off by management, so strategy rests on analysis, not on the loudest topic.
- Numbers that survive assuranceEvery data point traced to a source, a method and a control, so the assurance provider tests a system, not a spreadsheet.
- Lower cost of the second reportData flows, templates and reviews built once and run every year, with the simplified ESRS cutting mandatory data points by more than half.
- One programme across frameworksThe same inventory serves the ESRS, GRI, the ISSB standards, an ISO 14064-1 inventory and customer questionnaires, not a project per framework.
Measure the programme by data points with a documented method and control, days from year-end to a reviewable draft and assurance findings per report, not by page count.
Requirements
What are the main CSRD and ESRS requirements?
The directive says who reports, where, under which standards and with what assurance; the ESRS say what goes in the statement: two cross-cutting standards, five environmental, four social and one governance standard, kept as twelve in the simplified set with far fewer data points. ESRS 2 applies to every reporter; each topical standard applies where the matter is material. Interpretation for your facts stays with your auditor and legal advisers.
| Standard | What it requires of you | What it looks like in practice |
|---|---|---|
| CSRD Directive (EU) 2022/2464, as amended | Determine whether you are in scope and from which financial year; report in a dedicated section of the management report at the level required for your group; apply the ESRS; obtain limited assurance; use the required digital format | A scoping memo agreed with the auditor, a reporting calendar aligned to the financial close, and an assurance provider engaged early |
| ESRS 1 General requirements | Apply double materiality to identify impacts, risks and opportunities across your operations and value chain over short, medium and long-term horizons; use the consolidation scope of the financial statements; structure the statement, apply the phase-in reliefs available and disclose the materiality process | A documented materiality assessment with stakeholder input, scoring, thresholds and sign-off, a value chain map and a written basis of preparation |
| ESRS 2 General disclosures | Regardless of materiality, disclose governance of sustainability matters, the strategy and business model, how impacts, risks and opportunities were identified and are managed, and the minimum content of every policy, action, metric and target | Board and committee roles minuted, a strategy statement linked to the materiality results, and one template for policies, actions and targets across every topic |
| ESRS E1 Climate change | Where material, as it is for most reporters: a transition plan, climate policies, actions and targets, energy consumption and mix, gross Scope 1, 2 and 3 greenhouse gas emissions and the total, removals and carbon credits, internal carbon pricing and anticipated financial effects; a reporter that finds climate not material must explain why in detail | A greenhouse gas inventory with boundaries, factors and calculation records, an energy register, target baselines and a board-approved transition plan |
| ESRS E2 to E5 Pollution · Water and marine resources · Biodiversity and ecosystems · Resource use and circular economy | For each environmental matter found material: impacts, risks and opportunities, policies, actions, targets and the metrics the standard specifies, such as pollutants, water consumption in areas of water stress, sites near biodiversity-sensitive areas, resource inflows and outflows and waste | Site-level environmental data from permits, monitoring and an ISO 14001 system where one exists, under the same controls as financial data |
| ESRS S1 Own workforce | Working conditions, equal treatment and opportunities, and other work-related rights for employees and non-employees: workforce characteristics, engagement and remediation channels, policies, actions and targets, and metrics such as collective bargaining coverage, training, safety incidents and pay | HR, payroll and safety data reconciled to one headcount definition, and a tested process for raising concerns |
| ESRS S2 to S4 Workers in the value chain · Affected communities · Consumers and end-users | Where material: the people affected through the value chain, communities near operations and the users of products and services, with due diligence, engagement, channels for raising concerns, policies, actions and targets | Supplier and human rights due diligence records, community engagement logs and product safety incident registers |
| ESRS G1 Business conduct | Corporate culture, protection of whistle-blowers, political engagement and lobbying, supplier relationships including payment practices, and the prevention and detection of corruption and bribery, with incidents where they occur | Code of conduct, whistle-blowing and anti-corruption controls with their records, and supplier payment data |
What does useful CSRD evidence look like?
A materiality file with the long list of matters, the scoring, the stakeholder input and the sign-off; a data point inventory listing owner, source system, method, unit, control and reviewer for every disclosure; greenhouse gas workpapers with emission factors and boundaries; a policy, action and target register per material topic; reconciliations of headcount, energy and financial figures to the audited accounts; a record of estimates and their limitations; and the internal review and management approval of the statement. We build these from your real data from the first workshop and keep them in Effivity, so the assurance provider sees a system that runs.
CSRD requirements explained, standard by standardCompliance process
How do you become CSRD compliant?
Compliance is built, operated and then examined, in that order. Sterling designs and builds the programme with your team; the assurance provider decides whether the statement passes, and the law your auditor applies decides whether you are in scope.
- 01Confirm scope, wave and reporting level.Establish with your auditor and legal adviser which entities are in scope, the first financial year, whether a parent's consolidated statement covers you, which phase-in reliefs apply and who will assure.
- 02Gap analysis: review the current position against the ESRS.The gap analysis tests existing reporting, management systems, data sources and governance against ESRS 1, ESRS 2 and the likely material topics, keeps what works and agrees actions, owners and dates.
- 03Run the double materiality assessment.Map the value chain, build the long list of matters, engage stakeholders, score impacts, risks and opportunities against agreed thresholds and take the result to management for sign-off, with the reasoning recorded.
- 04Build the data, the controls and the disclosures.Inventory every data point the material standards require, assign owners and methods, close the gaps in emissions and HR data, write the missing policies, actions and targets and draft the statement as evidence accumulates.
- 05Review internally, then complete the assurance engagement.An internal audit of the data trail and a management review of the draft, findings closed with evidence, then the limited assurance engagement conducted from workpapers that already exist.
- 06Maintain the programme after the first report.Refresh the materiality assessment for changes in the business and the standards, run the data cycle on the financial calendar and track targets and actions through the year.
Judge an offer by what it leaves behind: who runs the materiality assessment, who builds the data inventory, whether the emissions method will withstand assurance, what your people will learn and where the evidence will live. How to choose a credible CSRD provider · The certification buyer's checklist
Cost
How much does CSRD reporting cost?
The price of a CSRD programme follows the material topics, the entities and countries consolidated, the state of the data and how much reporting already exists. A Sterling proposal keeps two things constant: every component visible, and the fee fixed.
| Cost component | What affects it |
|---|---|
| Consulting and implementation | Entities and countries in scope, material topics and their data points, the state of the emissions inventory, deliverables, and how much of the work your team takes on (Design™ or Drive™) |
| Assurance | Fees of the statutory auditor or accredited assurance provider for the limited assurance engagement, shown separately; a first year costs more where the data trail is thin |
| Internal resources and systems | Process-owner time for materiality workshops and data collection, finance and HR effort to reconcile figures, IT effort for extraction, supplier engagement, and any legal review of scope |
| Software and learning | Included in a Sterling engagement: Effivity for the programme and Sterling Academy access for your people, with users, courses and access period confirmed in the proposal |
| Continued support | The annual data cycle, materiality refresh, internal audit, target tracking and regulatory watch under Sustain™ |
What moves the price
- Entities, sites and countries to consolidate, and whether one statement covers the group
- Material topics, and whether Scope 3 emissions and value chain workers are among them
- The state of the data: management systems and a verified greenhouse gas inventory, or spreadsheets
- Whether a GRI or ISSB-based report exists and can be mapped rather than rebuilt
- The deadline set by the first reporting year, a lender or a parent company
What a Sterling proposal always shows
- Deliverables, responsibilities, assumptions and exclusions, in writing
- Assurance and legal fees identified separately, so the full programme cost is comparable
- Effivity, training and Academy access itemised at no additional cost
- Payment milestones tied to deliverables, not to the calendar
- One all-inclusive proposal. No surprises, ever
Timeline
How long does CSRD reporting take?
Six to twelve months is the realistic range for a first programme, counted to a draft statement ready for internal review: shorter where an environmental management system, an emissions inventory and a GRI report exist, longer where a group must consolidate many entities and collect Scope 3 data from suppliers for the first time. The pace is set by decisions on materiality and boundaries and by data collection through a reporting year, not by the writing.
| Phase | What determines the pace |
|---|---|
| Scope and gap analysis | Access to group structure, existing reports and data owners, and how quickly scope and reporting level are agreed with the auditor |
| Materiality and data build | Stakeholder availability for the materiality assessment, the state of emissions and HR data, supplier response on value chain data, and IT extraction work |
| Statement and internal review | Data collection covering the reporting year, drafting per topic, reconciliation to the financial statements, then internal audit and management review |
| Assurance engagement | The assurance provider's schedule alongside the financial audit, how fast requests are answered from the workpapers, and time to close findings before publication |
If your first reporting year has already begun, say so at the outset. We will say which data can still be captured, which will rely on disclosed estimates, and which decisions must be taken this quarter. A promise of an assurable statement in weeks, made before anyone has seen your data, is a warning sign, not a plan.
Challenges
Common CSRD implementation challenges
Most CSRD programmes stall on the same five problems. Each has a practical answer.
The materiality assessment is a workshop opinion, not an analysis.
We run it as a documented process: a value chain map, a long list of matters from ESRS 1, stakeholder input, scoring against thresholds for severity, likelihood and financial effect, and a management sign-off with the reasoning recorded.
Scope 3 emissions are unknown and suppliers do not answer.
We screen the Scope 3 categories for relevance, start with spend-based estimates where activity data is missing, disclose the method and its limitations, and run a supplier data programme sized to the value chain cap so requests are answered.
Sustainability data lives in spreadsheets nobody controls.
A data point inventory with an owner, source, method and control for every disclosure, extraction from the systems that hold the data, reconciliations to the audited accounts and a review trail, all in Effivity rather than an inbox.
Finance, HR, EHS and procurement each report a different truth.
One definition per metric, one consolidation scope aligned with the financial statements, one calendar aligned with the close, and a reporting lead with authority to arbitrate, agreed in week one.
The rules changed twice and the team has stopped believing any deadline.
We fix scope and first year with your auditor in writing, build against the simplified ESRS where they apply, watch transposition in your Member States and separate what is settled from what is pending, so work continues.
Your engagement
What your CSRD engagement includes
Your agreed scope covers what an assurable statement and a prepared team need, from one team, under one all-inclusive proposal: scoping, materiality, data and controls, documents, software, training and the review that proves it operates.
Scope, gap analysis and implementation plan
Entities, first reporting year, reporting level and phase-ins confirmed; every ESRS building block tested against the current position; actions, owners and dates agreed before work starts.
Double materiality, data and documentation
The materiality assessment and its file, the data point inventory with controls, greenhouse gas workpapers, policies, actions and targets per material topic and the statement itself, built on Sterling's template sets and adapted to your business.
Effivity ISO & GRC software
Your programme runs in Effivity from day one, included with the engagement at no additional cost.
Training for everyone
Internal auditor training for your audit team, as applicable to your standard, and preferential Sterling Academy access, including complimentary awareness training for your people as part of the engagement.
Internal audit and management review
Conducted or facilitated as agreed, with findings on the data trail and the draft closed with evidence before the assurance provider looks.
Assurance readiness and support
Workpapers, the basis of preparation and the responses to the assurance provider's requests prepared, with support through the engagement until the conclusion is issued.
The assurance conclusion remains with the independent assurance provider. Sterling's work is consulting; it is not legal advice.
How we deliver
How Sterling supports your CSRD implementation
Every CSRD engagement runs on Sterling OS™, our delivery operating system: five phases with named deliverables, decision owners and evidence at each stage. Your team carries as much of the work as you choose; the method, the software and the accountability do not change.
- 01Design™Guided implementation: your reporting lead and data owners build the programme with Sterling's structure, templates, workshops and coaching.
- 02Drive™Fully managed consulting: Sterling consultants carry the materiality assessment, data build, drafting and assurance preparation with your teams.
- 03Sustain™Operation after the first report: the annual data cycle, materiality refresh, target tracking, internal audit, refreshers and new-hire training, year after year.
- 04Automate™The programme in Effivity: materiality results, the data point inventory, emissions calculations, policies, actions, targets, suppliers, audits and management review in one workspace.
- 05Revise™Changes in the rules and in your business: the simplified ESRS, the Commission's assurance standards, national transposition, a new subsidiary or a changed value chain.
The first week settles the engagement team, the weekly working session, the deliverables and who decides what.
How Sterling OS™ worksOften combined with
Standards organisations pair with CSRD / ESRS
- AA1000AA1000 implementation and requirements: apply the AccountAbility Principles and SES, then prepare for AA1000AS v3 assurance by a licensed provider.
- B Corp CertificationB Corp certification made clear: the new B Lab Standards, Foundation Requirements, seven Impact Topics, the audit route and how Sterling prepares you.
- CBAMCBAM compliance and requirements explained: authorised declarant status, the 50-tonne threshold, verified embedded emissions and how Sterling helps you prepare.
- CDPCDP disclosure consulting: a complete, evidenced response on climate, forests and water, prepared with your team.
- CSDDDCSDDD compliance and requirements after Omnibus I: scoping, risk-based due diligence, complaints, monitoring and the 2029 start, delivered in one all-inclusive proposal.
- EcoVadisEcoVadis rating consulting: evidence on environment, labour and human rights, ethics and sustainable procurement, prepared for the assessment EcoVadis runs.
Effivity · CSRD programme software, included in every engagement
How Effivity helps you fulfil, automate and simplify the requirements of the CSRD and the ESRS.
Every Sterling CSRD engagement includes Effivity, the ISO and GRC automation platform built by the Sterling group and used in 50+ countries. Your consultant configures the workspace within the agreed scope, so the materiality assessment, data point inventory, emissions calculations, policies, actions and targets, supplier requests, training records, audits and management review live in one place, and the assurance provider sees a live system with an audit trail. Sterling consulting clients get their Effivity subscription included with the engagement, at no additional cost.
Double materiality with a file behind it
The long list of matters, stakeholder input, scoring against thresholds, the value chain map and management sign-off, kept as a record the assurance provider can follow from matter to disclosure.
Governance, strategy and one policy template
Board and committee responsibilities, the strategy and business model linked to the materiality results, and one structure for every policy, action, metric and target, so the minimum content is never missed.
Greenhouse gas inventory and transition plan
Scope 1, 2 and 3 calculations with boundaries, emission factors and workpapers, energy consumption and mix, target baselines and progress, and the transition plan with its actions and owners.
Environmental data from the sites that generate it
Waste, materials, water and pollutant data captured per site with permits and monitoring records attached, under the same controls as financial figures.
Workforce metrics reconciled across countries
Headcount, contract types, collective bargaining coverage, training hours, safety incidents and pay data drawn from HR and payroll under one definition per metric, with the channel for raising concerns and its cases.
Supplier due diligence and value chain requests
A supplier register with risk screening, due diligence records and data requests sized to the value chain cap, so Scope 3 and value chain disclosures rest on evidence.
Conduct controls with their records
The code of conduct, whistle-blowing cases, anti-corruption training and incidents, lobbying records and supplier payment practices, each with the evidence the G1 disclosures require.
Data point inventory, audits, training and review
Every disclosure with its owner, source, method, control and reviewer, the internal audit programme and findings, training records linked to Sterling Academy and a management review with inputs, decisions and actions; forms and reports adapted to your work, without code.
What this means at the audit
The assurance provider asks for the materiality file, the emissions workpapers, the data point inventory, the policies behind each disclosure and the reconciliations to the accounts, with a fieldwork date attached. In Effivity each request maps to a screen showing dates, owners and evidence. Sustain™ runs in the same workspace, so the second report comes from a system that never stopped.
In your engagement
- Subscription included with the engagement, at no additional cost
- Configured by your Sterling consultant within the agreed scope
- Your inventory, registers and records migrated, not retyped
- Admin and user training for your team
- Modules for EMS, OHSMS, QMS, ISMS and more when you integrate other standards
CSRD client experience
Client letters on file, available on request.
Signed client letters for CSRD / ESRS are available on request. The client feedback wall lists every letter by standard.
Programmes with CSRD reporting in scope
How CSRD reporting fits a wider management system programme.
- 01Integrated management systems
Manufacturing group: environment, energy, greenhouse gases and CSRD reporting as one programme
How a programme of this kind runs: ISO 14001 supplies the environmental aspects, legal register and site controls behind the E2 to E5 disclosures; ISO 50001 the energy data E1 asks for; an ISO 14064-1 inventory the Scope 1, 2 and 3 figures, verified under ISO 14064-3 by an accredited body; and the CSRD programme adds double materiality, the social and governance topics and the statement itself, on one evidence base, one audit calendar and one workspace.
Sterling Academy · CSRD and ESRS e-learning
Train every employee on CSRD reporting, not just the sustainability team.
Sterling Academy trains the whole workforce and the people who run the programme, with video lessons and checkpoints, a final exam and a numbered Certificate of Completion per learner, verifiable online. Sterling consulting clients benefit from preferential course access and special pricing through their Sterling consultant, including complimentary awareness training for their people as part of the engagement.
- CSRD awareness for every employee, so the people who record energy, waste and incidents know why the numbers matter
- Practitioner courses for the reporting lead, data owners and the materiality team
- Internal auditor training for the people who will audit the programme, as applicable to your standard, as part of the engagement
- Learner progress by department and a training report for the assurance provider
- New hires trained as they arrive, so data quality holds as teams change
- A Sterling consultant reachable when a learner needs one
Keep exploring
Explore more about CSRD / ESRS
Watch a video on how to comply with CSRD here.
Watch a video on CSRD and ESRS requirements here.
Why Sterling
Want successful CSRD reporting? Come to Sterling.
Whether you are a European group preparing a first statement, a first-wave reporter moving to the simplified ESRS, or a company in the Gulf, India or South East Asia whose European customers want value chain data, Sterling builds one reporting programme with clear local ownership.
Management systems in 60+ countries since 2003
Environmental, energy, safety and governance systems implemented for manufacturers, utilities, logistics groups, banks and service companies across every region we serve, with one engagement team accountable in every country you consolidate.
All-inclusive proposal
Consulting, Effivity, training and Academy access in one proposal, with assurance and legal fees identified separately. No surprises, ever.
A programme your people can operate
Less paperwork and more control: the materiality process, the data inventory, training and software connected to the way sites and functions already record their numbers, so the second report is routine.
Expert and experienced consultants
Consultants who have advised on environmental, energy and governance management systems across sectors and countries since 2003, and who build the data trail properly the first time.
The Sterling Promise
What our CSRD reporting success guarantee means
We stay with you until the agreed CSRD programme outcome is achieved: the materiality assessment signed off, the data inventory and controls operating, the statement drafted and reconciled, the workpapers ready and your team able to answer the assurance provider without us in the room. Clear explanations, practical delivery, included software and employee learning make the investment a capability, not a binder.
The engagement defines the entities, reporting year, scope, outcome and responsibilities. Your organisation supplies accurate data about its operations and value chain, gives access to the systems and people in scope and operates the agreed controls. The assurance conclusion is issued by the independent assurance provider; whether and when you are in scope is a matter for your auditor and legal advisers. Our commitment covers the agreed programme support; it is not legal advice or a warranty of the assurance outcome.
After the first report
What happens after CSRD reporting?
The first statement starts an annual cycle. The business changes, material topics shift, targets need progress reported, and the rules keep moving: the simplified ESRS apply from financial years beginning in 2027, the Commission is due to adopt limited assurance standards by 1 July 2027, and Member States are transposing the 2026 amendments. The programme absorbs each through the materiality refresh, the data point inventory, the reporting calendar and the annual audit and review.
Under Sterling OS™ Sustain™ we run that cycle with you: the materiality refresh, the data cycle on the financial calendar, target tracking, a regulatory watch, refresher training and the internal audit, so the second statement costs less than the first.
FAQs
Frequently asked questions about the CSRD and the ESRS
Is there such a thing as CSRD certification?
No. The directive requires the sustainability statement to be examined by an assurance provider, who issues a limited assurance conclusion: an opinion on your statement for one year, not a certificate for your organisation, given by the statutory auditor, an audit firm or, where the Member State allows, an accredited independent assurance services provider. A "CSRD certified" badge from anyone else certifies nothing.
Are we in scope, and from which financial year?
Under Directive (EU) 2026/470, from financial years starting on or after 1 January 2027 the obligation applies to undertakings and parent companies exceeding 1,000 employees and €450 million net turnover, listed or not; non-EU groups with more than €450 million EU net turnover and a subsidiary or branch above €200 million fall under the third-country regime. Companies that reported for 2024 continue, though a Member State may exempt those below the new thresholds for 2025 and 2026. Transposition and group structures change the answer: confirm your wave and scope with your auditor or legal adviser.
What did the Omnibus change, and is it final?
The "stop-the-clock" directive of April 2025 delayed the second and third waves by two years. The content directive was formally adopted as Directive (EU) 2026/470 on 24 February 2026 and has been in force since 18 March 2026: it raised the thresholds, removed listed companies below them, introduced the value chain cap, deleted the sector-specific standards and the planned reasonable assurance, and moved the Commission's limited assurance standards to 1 July 2027. The simplified ESRS, adopted by the Commission on 3 July 2026, were completing Parliament and Council scrutiny when this page was written; they apply from financial years beginning in 2027.
What is double materiality, and who decides it?
ESRS 1 requires each sustainability matter to be assessed from two perspectives: impact materiality, where your actual or potential impacts on people or the environment are material, and financial materiality, where the matter triggers or could reasonably be expected to trigger material financial effects on the company. A matter material from either perspective is reported. Management decides, with stakeholder input, documented thresholds and the reasoning on file, because the assurance provider examines the process as well as the result.
Which ESRS must we apply, and can we skip climate?
ESRS 2 applies to every reporter regardless of materiality. Each topical standard, E1 to E5, S1 to S4 and G1, applies to the matters your assessment finds material. Climate is the exception in practice: a company that concludes climate change is not material must disclose a detailed explanation of that conclusion, including a forward-looking analysis. The simplified ESRS keep the twelve standards and this logic while removing most data points.
Who provides the assurance, and what does limited assurance involve?
The statutory auditor or audit firm or, where your Member State permits it, an accredited independent assurance services provider. Limited assurance means enquiries, analytical procedures and tests sufficient to conclude that nothing has come to the provider's attention to suggest the statement is materially misstated. The Commission's assurance standards are due by 1 July 2027; until then national standards and ISSA 5000, the international sustainability assurance standard, guide the work.
We already report under GRI, the ISSB standards or ISO 14064-1. How much is reusable?
A great deal. EFRAG and GRI have stated that ESRS reporters are considered to be reporting with reference to the GRI Standards, with impact definitions closely aligned, so a GRI reporter's materiality work and data carry over. The ESRS–ISSB interoperability guidance of May 2024 shows the climate disclosures largely coincide, though the ISSB standards use financial materiality only. An ISO 14064-1 inventory verified under ISO 14064-3 gives ESRS E1 its Scope 1, 2 and 3 figures.
We are a supplier outside the EU. Do we have to report?
Not under the directive, unless you belong to a group that meets the third-country thresholds. What reaches you is your customers' value chain requests, and the 2026 amendments cap them: a company in scope cannot require a supplier with fewer than 1,000 employees to provide more than the voluntary standard covers, and the supplier may decline the excess.
What do you need to prepare a CSRD proposal?
Your group structure, countries and entities, your position against the employee and turnover thresholds, the financial year you expect to report first, what reporting, management systems and emissions data exist today, whether customers or lenders are already asking, and who audits your accounts. That is enough for a scoped, all-inclusive proposal; no materiality assessment is needed first.
Before the first call
Prepare a useful CSRD readiness brief
You do not need a materiality assessment before the first discussion. Bring a short account of your group, your data and who is asking. Seven questions are enough:
- Who is asking, and what do they want to see: a parent company, a lender, a customer's value chain request, a regulator, or your own board?
- Where does the group stand against the thresholds (employees and net turnover), and which entities and countries would a statement consolidate?
- Which financial year do you expect to report first, and who audits your financial statements?
- What exists today: a GRI or ISSB-based report, an EcoVadis rating, a greenhouse gas inventory, an ISO 14001 or ISO 50001 system?
- Where do energy, waste, water, HR and safety data live, and who owns them?
- Who can make decisions and give time: a reporting lead, finance, HR, EHS, procurement, legal counsel?
- Is there a lender, tender or parent deadline to plan around?
Those seven answers let us set the scope and the all-inclusive proposal realistically. They set up a conversation; they are neither a scored assessment nor a legal opinion.
Don’t be fooled by certification scams
If it takes ten days, it is not CSRD reporting.
Because no CSRD certificate exists, the market sells substitutes: "CSRD certified" and "ESRS compliant" badges, ESG scores presented as compliance, template statements with another company's material topics still in them, and software that generates a report overnight from unchecked figures.
How to choose a credible CSRD provider
- Ask what will exist at the end, a materiality file, a data point inventory with controls, emissions workpapers, policies, actions and targets, a statement and trained people, and who produces each.
- Ask what any "certificate", badge or score actually is. The only external conclusion the directive recognises is the assurance provider's; any other seal is marketing, whatever the logo says.
- Ask how the materiality assessment will be done, with your value chain, your stakeholders and documented thresholds, not from a generic topic list pasted into a template.
- Identify who carries each task, which assurance and legal costs are separate, and what support exists when the assurance requests arrive.
- Ask what your people will learn and where the workpapers will live. A data trail on the consultant's laptop leaves with the consultant.
- Walk away from "CSRD certified", "ESRS compliant in ten days" and a report generated before anyone has seen your data. The statement is yours, the assurance is the provider's; neither comes as a badge.
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