Scope of application of the CSRD

Since the CSRD’s entry in force in 2024, companies that were already subject to the NFRD and large non-EU issuers, also called “first wave” companies, have to report a sustainability statement in accordance with the CSRD and the ESRS.

The Omnibus amendments will change the scope of application starting from 2028:

• European companiesand non-EU issuers employing on average over 1,000 employees and with a net annual turnover of over €450 million will remain within the scope of the CSRD.
• Non-European groupswill only be required to provide a CSRD report if they exceed €450 million net turnover generated in the EU and have at least one EU subsidiary or branch with over €200 million net turnover, beginning in FY28 (reporting in 2029). Reporting standards for non-European companies are not expected until October 2027 at the earliest.
• Financial holding companies will be exempt, but their subsidiaries or sub-groups may still be required to report if they meet the threshold for application.
• All companies, including those with transferable securities admitted to trading on an EEA regulated market, will be eligible for group exemption if they are included in a consolidated sustainability report.

In its Recommendation (EU) 2025/1710 issued in July 2025, the Commission recommends that SMEs and micro-undertakings that wish to voluntarily report sustainability information do so in accordance with the voluntary sustainability reporting standard  developed by EFRAG.

This voluntary standard aims to reduce the need for SMEs to respond to separate requests for information from individual counterparties for their reporting, due diligence and risk management or other uses of sustainability information. In addition, voluntary reporting of sustainability information can facilitate access to sustainable finance and help SMEs to better understand and monitor their own sustainability performance, thereby improving resilience and competitiveness.

In the future, sustainability reporting standards for voluntary use should be adopted by the Commission as a delegated act.