CSRD in simple terms (2025): who must report, when, and a starter plan

I advise companies on EU reporting. Below is a clear view of the CSRD: who is in scope, when reporting starts, and what to do first.

The short answer

• What: the CSRD requires a yearly sustainability statement under ESRS, with double materiality (impact + financial).
• Who: large EU companies, listed SMEs (with a deferral option), and certain non-EU groups with large EU activity.
• When: phased by financial year (see the timeline below). First movers already reported for FY 2024. Others follow in waves. :contentReference[oaicite:0]{index=0}

Who is in scope (plain list)

• Large EU undertakings (Accounting Directive size tests). :contentReference[oaicite:1]{index=1}
• Listed SMEs on EU regulated markets (micro-undertakings excluded). They can use a lighter standard and may defer reporting (see timeline).
• Non-EU (“third-country”) parent groups with significant EU turnover and at least one large EU subsidiary or branch.

Timeline (what applies when)

• FY 2024 → report in 2025: companies already under NFRD (large public-interest entities).
• FY 2025 → report in 2026: other large EU undertakings newly in scope.
• FY 2026 → report in 2027: listed SMEs (with a right to opt-out for two years; last start is FY 2028 → report in 2029).
• FY 2028 → report in 2029: non-EU parent groups with significant EU activity (application date unchanged).

Note on changes in 2025: the EU is running a simplification process (“omnibus”). Some proposals would ease or defer parts of the regime, but they need formal approval to take effect. Watch the Commission updates.

What you must report (ESRS, in short)

• Standards: report under the ESRS (first set adopted) with double materiality.
• Topics: governance, strategy, risks, metrics and targets across environment, social and human rights, and governance areas.
• Assurance: an auditor/assurance provider gives limited assurance from the first report; the EU plans an EU limited-assurance standard by 1 Oct 2026 and may move to reasonable assurance after 1 Oct 2028 (subject to assessment).

Light tools for SMEs and suppliers

• Listed SMEs: a proportionate ESRS will apply (LSME). :contentReference[oaicite:12]{index=12}
• Non-listed SMEs: a voluntary SME standard (VSME) is available as Commission guidance to help answer customer requests.

My 6-step starter plan

1. Decide scope: confirm if the group or the German entity is in scope and when. Map subsidiaries/branches and the FY that triggers reporting.
2. Materiality first: run a simple double-materiality screen; list likely topics (e.g., climate, workers, supply chain). Keep notes.
3. Data map: where the data will come from (finance, HR, HSE, procurement, IT). Define owners and cut-offs.
4. Controls & evidence: basic registers, versioning, and sign-offs so the auditor can test them.
5. Vendor requests: prepare a short questionnaire aligned with ESRS; point small suppliers to VSME guidance.
6. Assurance prep: agree the scope with your auditor early (limited assurance). Build a timetable back from the board approval date.

Common pitfalls I see

• Leaving materiality to the end. It should drive the whole report and the data list.
• Copy-pasting policies. ESRS expects evidence, responsibilities and metrics that match your business.
• No audit trail. Numbers with no owner or timestamp slow assurance and increase cost.
• For SMEs: ignoring the defer/voluntary tools (LSME/VSME) when they would reduce workload.

FAQs

Does CSRD apply to non-EU groups?

Yes. Certain third-country parent groups with large EU turnover must report for FY 2028 (report in 2029).

Is assurance mandatory from the first report?

Yes, limited assurance is required. EU-level limited-assurance standards are due by 1 Oct 2026; reasonable assurance may follow from 2028 if the EU confirms feasibility.

What if the rules change under the 2025 “omnibus”?

Follow the Commission’s updates. Proposals must be adopted before they change obligations. We will adjust the plan if and when changes are confirmed.

Schedule a personal consultation. I will confirm your scope and dates, run a focused materiality screen, map data and controls, and set a simple plan that your auditor can test.

Further reading (official)

• European Commission — Corporate sustainability reporting (CSRD)
• EFRAG — ESRS Set 1 (architecture and topics)
• Commission — Voluntary SME Standard (VSME) Q&A
• Council of the EU — Two-year delay for sector-specific and third-country standards adoption (application for third-country groups unchanged in FY 2028)
• Commission Q&A — ESRS and listed SME deferral option
• Commission FAQs — Assurance timing (limited by 2026; potential reasonable by 2028)

Disclaimer: This article provides general information and does not replace individual legal advice.