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Corporate Sustainability Reporting Directive (CSRD)

The CSRD requires companies to report on their environmental and social impacts, and on the strategies they use to manage them. Two rounds of simplification at EU level have narrowed the group of companies that report directly. You still need to be able to produce reliable sustainability data. Today it is your banks, investors and business partners who ask for it, not only the legislator.

Are you still in scope?

The Omnibus I Directive (EU) 2026/470, in force since 18 March 2026, has significantly narrowed the scope. In practice, three situations can be distinguished.

Companies that report directly: Reporting applies to companies with more than 1,000 employees on average over the financial year and more than EUR 450 million in net turnover. Both thresholds must be met. Being listed on a regulated market is no longer a criterion in its own right.

Companies that have dropped out of scope: Many companies have invested considerable resources in materiality assessments, data processes and reporting structures, and now fall below the new thresholds. The question for them is which of that groundwork still pays off, whether for internal steering, for financing discussions, or for voluntary reporting under the new Voluntary Standard.

Companies affected indirectly: Even without a reporting obligation of their own, companies are asked for ESG data by customers, lenders and investors. The value chain cap limits those requests. Companies in scope may not ask value chain partners with up to 1,000 employees for anything beyond what the voluntary standard covers. Knowing where that line sits allows you to assess incoming requests and to prepare your data once, in a form that satisfies several requesters at the same time.

Transposition into German law

Until the German implementing act is promulgated, the CSR-Richtlinie-Umsetzungsgesetz (CSR-RUG) of 2017 formally continues to apply. Under that act, public-interest entities with more than 500 employees publish a non-financial statement, and companies that were not previously required to report are not required to do so under German law either. Once the implementing act is promulgated, the narrower scope introduced by Omnibus I takes its place and reporting follows the ESRS. The transposition deadline is 19 March 2027.

For your preparations, the exact date matters little. You will need a materiality assessment and functioning data processes regardless of when the act enters into force, and the lead time they require is what constrains the project in practice.

CSRD for banks, insurers and asset managers

For financial institutions, the CSRD touches several regulatory frameworks at once. Most of the friction in practice comes from where they overlap.

Climate disclosures and financed emissions: The ESRS require financial institutions to take the PCAF methodology into account when accounting for financed emissions. A reporting requirement therefore turns into a data project covering the entire lending and investment portfolio, including how you handle data gaps and how you classify data quality in a way others can follow.

Consistency across frameworks: The figures in your sustainability statement need to align with your SFDR disclosures, your taxonomy KPIs and, for insurers, your ORSA. Inconsistencies between these documents surface during the audit and are expensive to resolve after the fact.

A transition plan with two addressees: The transition plan under the ESRS meets the ESG risk plan under Section 26d of the German Banking Act (KWG). Both call for targets, metrics and time horizons. Develop them separately and you pay twice, and you end up with discrepancies that you will have to explain to the supervisor.

The value chain cap cuts both ways: Institutions in scope need emissions data from their corporate clients, yet may only ask smaller clients for a limited set of information. How that limit sits alongside the requirements for financed emissions has not yet been settled.

The revised ESRS

On 21 September 2026 a substantially revised version of the European Sustainability Reporting Standards (ESRS) was published in the Official Journal. Delegated Regulation (EU) 2026/1563 enters into force on 10 November 2026. The number of mandatory datapoints falls by more than 60 per cent, from over 1,000 to around 320. Voluntary datapoints have been removed entirely. Double materiality and limited assurance both remain.

The revised standards apply as an obligation for financial years beginning on or after 1 January 2027, with the first reports published in 2028. For financial years beginning in 2026 there are three options: apply the previous standards, apply the revised standards in full, or apply the previous standards while making use of individual reliefs from the new version. Whichever route is taken has to be stated in the report.

Fewer datapoints do not automatically mean less work. The weight shifts to the materiality assessment, which determines which disclosures apply at all and which is examined accordingly.

How implementation works

Implementing the CSRD is primarily a data project with a long lead time. Most of the work falls due before anyone starts writing the report.

1. Scoping. The starting point is whether and from which financial year a reporting obligation applies, which group entities to include, and whether an exemption through consolidated reporting is available. For financial institutions, there is the added question of how far the value chain extends, since it sits mainly in the portfolio rather than in procurement.

2. Double materiality assessment. This determines what you report on at all, and it assesses two dimensions. Impact materiality covers the company's actual and potential impacts on the environment and society. Financial materiality covers the opportunities and risks that sustainability matters create for the company.

Internal and external stakeholders belong in the process, and the whole sequence needs to be documented. The audit also looks at how you got there: the assessment logic, the thresholds, the choice of stakeholders and the reasoning behind topics you ruled out. Now that the revised ESRS have cut the list of datapoints, this step largely determines the effort the project takes overall.

3. Gap analysis. The material topics translate into specific disclosure requirements, and from there into the question of which data you already hold, which you hold in insufficient quality, and which is missing altogether. In our experience, the metrics cause less trouble than the qualitative disclosures on policies, actions and targets, for which companies often have no documented position internally.

4. Data collection, responsibilities and controls. This step is usually the most demanding. You need to settle who supplies which data, at what intervals and following which methodology, and how all of that is recorded. For financial institutions it mainly concerns emissions data from lending and investment portfolios, which comes together from external sources and estimation methods.

5. Preparing the report. The sustainability statement forms part of the management report. Alongside the general disclosures on governance, strategy and business model, you report on your material topics, under the climate standard for instance on greenhouse gas emissions, energy consumption, climate targets and the transition plan.

6. Assurance. The sustainability statement is subject to limited assurance. The move to reasonable assurance that was originally envisaged has been dropped. The audit covers not only the disclosures themselves but the processes behind them, above all the materiality assessment and the derivation of the data. Documentation should therefore be produced alongside the substantive work rather than afterwards.

The work does not end with the first report. The materiality assessment needs to be revisited regularly, and the data processes run every year. The second cycle is considerably easier if you documented the first one properly.

Our services

Double materiality assessment: We run the assessment with you, from stakeholder engagement through the scoring methodology to audit-proof documentation of assumptions and thresholds. For financial institutions we apply a sector-specific approach that includes the portfolio perspective.

Gap analysis and transition to the revised ESRS: We compare your existing reports and data processes against the new version of the standards and show you which disclosures fall away, which remain and where the gaps are. The result is an action plan that fits the capacity you actually have.

Policies, actions and targets: For every material topic, the ESRS ask which policies a company pursues, which actions it takes and which targets it has set. This is where most gaps come to light, because on many topics there is established practice but no documented policy. We develop the missing policies with you, derive actions with clear ownership, and formulate targets that can be measured and tracked.

Data and audit readiness: We build the collection processes with you and document data sources, assumptions and methodological decisions so that they hold up to external assurance. For financial institutions this includes linking them to PCAF accounting for financed emissions.

Transition plan: We develop your transition plan so that it is consistent with your carbon footprint, your climate targets and, for institutions, with the ESG risk plan under Section 26d KWG.

Whether it is a double materiality assessment or the move to the revised ESRS, we will work out with you where you stand and which step makes sense next.