CSRD vs ISSB: who reports what under the CSRD and ESRS and under IFRS S1 and IFRS S2

CSRD vs ISSB: the short answer

The CSRD decides who must report in the European Union and requires them to apply the European Sustainability Reporting Standards. The ISSB writes standards and has no power to require anyone to use them. Whether IFRS S1 and IFRS S2 bind you depends on where you are listed or regulated, or on a choice by your board, parent or lenders.

The second difference is the audience. An ESRS sustainability statement answers two questions: how sustainability matters affect the company, and how the company affects people and the environment. ISSB disclosures answer only the first, for the people who provide capital.

CSRD and ESRS against the ISSB standards, side by side

Who reports under each

The CSRD: a legal scope with thresholds

The directive first applied to financial year 2024. The Omnibus I content directive, in force since 18 March 2026 with a year for Member States to transpose it, replaced the original waves. For financial years starting on or after 1 January 2027, a company reports if it exceeds both an average of 1,000 employees and EUR 450 million net turnover. Listed companies below those figures drop out, and a Member State may exempt first-wave companies below them for financial years 2025 and 2026.

Non-EU groups come in through their European business: the thresholds are EUR 450 million of net turnover in the Union for the parent and EUR 200 million for the EU subsidiary or branch. Suppliers with up to 1,000 employees are protected by the value chain cap: a reporting customer may not demand more from them than the voluntary standard covers, and they may decline requests that go further.

The ISSB standards: whoever a jurisdiction names

The 1 January 2024 effective date of IFRS S1 and IFRS S2 binds only a company that chooses to apply them. Where a regulator or exchange introduces ISSB-based rules, those rules decide who reports, from which year and with which modifications. The ISSB tracks this in its jurisdictional profiles and snapshots, last updated on 24 September 2026; profiles exist for Australia, Japan, Malaysia, the Philippines and Singapore, among others. Country detail sits in guides such as ISSB reporting in the Philippines.

Double materiality and financial materiality in practice

Under the ESRS, a matter is material from the impact side when it concerns actual or potential impacts of the company on people or the environment, and from the financial side when it triggers, or could reasonably be expected to trigger, material financial effects. Under IFRS S1, only the second question counts.

Take a garment maker. Wages and working hours in its supply chain are likely to be material under the ESRS, through ESRS S2 Workers in the value chain, even if no investor has ever asked. Under the ISSB standards the same topic is reported only if omitting it could reasonably be expected to influence the decisions of a lender or shareholder.

An ESRS assessment needs stakeholder input on impacts, while an ISSB assessment needs thresholds agreed with finance and a screening of the SASB disclosure topics, which IFRS S1 requires companies to consider. A group reporting under both runs one assessment with two scoring columns, not two workshops. The method is in Double materiality assessment step by step.

What each asks you to disclose

ESRS 2 General disclosures apply to every reporter regardless of materiality. Topical standards apply where a matter is material. A company that finds climate not material must explain why in detail.

IFRS S1 sets the general requirements and IFRS S2 the climate requirements, both built on the four content areas that came from the TCFD recommendations. IFRS S2 requires Scope 1, Scope 2 and Scope 3 greenhouse gas emissions measured under the GHG Protocol Corporate Standard (2004), and asks companies to refer to and consider industry-based metrics derived from the SASB Standards. December 2025 amendments easing certain emissions requirements apply from 1 January 2027.

On industry content, the two have moved apart. Directive (EU) 2026/470 removed the power to adopt sector-specific ESRS, leaving only non-binding guidance, while the ISSB keeps industry metrics at the centre of IFRS S2. On breadth, the ESRS reach well beyond climate, while the ISSB currently has one topical standard, on climate.

For the simplified ESRS adopted by the Commission on 3 July 2026, see The simplified ESRS: what changes for 2027.

Assurance, timing and the first year

The CSRD requires limited assurance; the Omnibus removed the planned move to reasonable assurance and set 1 July 2027 as the deadline for the Commission's limited assurance standards. The ISSB standards contain no assurance requirement at all; they are written so that the information can be assured, and each jurisdiction decides whether it must be.

An ISSB reporter may, in its first year, limit disclosures to climate, publish after the financial statements, omit Scope 3 and comparatives, and keep an existing emissions method instead of the GHG Protocol. The CSRD statement sits inside the management report, on the financial reporting timetable, with the ESRS phase-in reliefs.

When one applies, and when both do

Many groups outside Europe meet both: ISSB-based rules at home and the CSRD through a large EU business. The interoperability guidance published by the IFRS Foundation and EFRAG on 2 May 2024 is the starting point: a company applying the ESRS can meet the ISSB climate requirements with a very limited number of points to consider. The reverse does not hold: the ESRS require impacts and topics the ISSB does not cover.

Where GRI is also in play, the three-way comparison is in CSRD vs ISSB vs GRI: what differs and what carries over.

CSRD vs ISSB: questions buyers ask