CSRD: what the EU sustainability reporting directive requires, and who it covers

What is the CSRD?

The Corporate Sustainability Reporting Directive (CSRD) is the European Union's law governing how large companies disclose information about their environmental, social and governance (ESG) performance. It requires in-scope companies to publish standardised, independently assured sustainability data alongside their financial statements.

Its significance is that it converts sustainability reporting from a voluntary, fragmented exercise into a regulated discipline with much of the rigour of financial accounting. It replaced the earlier Non-Financial Reporting Directive with a far more comprehensive framework built on double materiality and mandatory assurance.

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How does the CSRD relate to the ESRS?

The CSRD and the ESRS work as law and rulebook. The CSRD is the directive: it sets which companies must report and the overarching obligations. The European Sustainability Reporting Standards are the technical requirements inside it that specify exactly what must be disclosed and how.

In practice, a company complies with the CSRD by reporting according to the ESRS. The directive creates the duty; the standards define the detailed data points, spanning environmental, social and governance topics, that satisfy it.

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Which companies must comply, and when?

The scope and timeline have shifted significantly. Following the Omnibus simplification package that moved through 2025 and 2026, the CSRD was refocused on the largest companies, broadly those above 1,000 employees and a high turnover threshold, and reporting deadlines for later waves were postponed.

Because these rules were still being revised at the time of writing, with simplified standards and reduced data points in consultation, any company assessing its obligations should confirm the current thresholds and dates against official European Commission sources rather than relying on a general definition.

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Meeting CSRD social disclosures with better data

The core challenge the CSRD creates for social-impact teams is evidence: figures that were once narrative now need to be auditable. A grant management software platform captures grant, donation and volunteering results as structured data through grantee reporting, so the social figures feeding a company's disclosures are traceable to source.