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worldwide[Webinar] CSRD & ESRS: Thriving in the New Era of Corporate Sustainability Reporting. November 21 at 10 AM ET. —Watch On-Demand

Broadening Sustainability Reporting Obligations

The CSRD is part of the European Green Deal, which is a set of policies and initiatives aimed at making Europe the first climate-neutral continent by 2050. When it first came into effect, the CSRD expanded the scope of environmental, social, and governance (ESG) reporting requirements. It also required independent third-party audits of companies’ sustainability reports to ensure that the information is accurate and reliable.

CSRD Changes Under the Omnibus Simplification Package

However, on February 26, 2025, the European Commission published proposals for the first Omnibus Simplification Package. The proposals outline amendments to the CSRD, among other EU regulations, that reduce the regulation scope and timelines and removes a number of other requirements.

  • Revises the delegated act establishing the European Sustainability Reporting Standards (ESRS) to reduce the number of data points needed and improve consistency with other legislation
  • Removes the ability of the European Commission to adopt sector-specific standards
  • Postpones the reporting deadlines for large companies and listed SMEs by two years
  • Establishes a value-chain cap with in-scope companies engaging with value-chain entities (meaning there’s a limit to the amount of data that can be requested of out-of-scope companies)

Sweeping Impacts

The CSRD marks a new era of non-financial reporting requirements due to rising ESG demands. Requiring standardized reporting to enable more informed investment decisions, the CSRD will significantly impact corporate sustainability reporting in the EU and have an extended ripple effect around the world. These impacts include:

  • Expanded reporting obligations
  • Enhanced disclosure security and audibility 
  • Digitization of sustainability information
  • More supply chain transparency

Frequently Asked Questions About CSRD Compliance

Get answers to your most pressing questions about the CSRD.

Who is in scope of the CSRD?

Under the proposed changes to the CSRD included in the Omnibus Simplification Package, the number of in-scope companies has been reduced by approximately 80%.

The modified scope only applies to large undertakings that have more than 1,000 employees and either a turnover above €50 million or a balance sheet total above €25 million.

Originally, the CSRD applied to roughly 50,000 EU companies, extending in 2025 to include approximately 10,000 additional public and private non-EU companies.

Businesses that are not required to report under the CSRD but are a part of the value chain for in-scope entities may still be required to complete and comply with sustainability requirements for mandatory disclosure. Prepare your business for the CSRD with Assent’s comprehensive suite of solutions.

 

How does the Omnibus Simplification Package affect companies in scope of the CSRD?

Companies that are in scope of the CSRD need to ensure that their sustainability programs are agile and proactive, because sustainability reporting requirements are a moving target. Companies should implement a platform that streamlines supplier engagement and uses AI to rapidly deliver risk insights to help protect their compliance.

If our reporting aligns with CSRD requirements, will we also meet Corporate Sustainability Due Diligence Directive (CSDDD) requirements?

While the CSRD and CSDDD are similar, they represent two different legal obligations. The CSDDD targets human rights and environmental risks in the supply chain and outlines measures to manage these risks. In contrast, the CSRD requires companies to report on their sustainability activities more broadly — this will cover elements identified in a CSDDD program, but also include further topics.

How does the CSRD relate to the Non-Financial Reporting Directive?

The CSRD expands the scope of the existing Non-Financial Reporting Directive (NFRD), which has been in effect since 2018. The NFRD requires large publicly traded companies to report on certain non-financial information, such as their environmental and social performance. The CSRD extends this requirement to all large companies, regardless of whether they are publicly traded or not. It also expands the scope of the information that companies are required to report on to include more detailed information about their sustainability risks and opportunities.

What is the European Sustainability Reporting Standard (ESRS) and how is it related to the CSRD?

The ESRS and the CSRD are both crucial parts of the EU’s effort to enhance sustainability performance among businesses. The ESRS is a reporting standard that companies will use to meet CSRD requirements. It provides the framework and methodology for businesses to report their sustainability performance.