CSRD: A new era of transparency

The Corporate Sustainability Reporting Directive (CSRD) (EU Directive 2022/2464) is a European Union law requiring companies to report how their business affects the environment, society, and governance. It aims to increase transparency and ensure companies provide reliable data on their sustainability efforts, allowing investors, customers, and other stakeholders to make more informed decisions.

The CSRD is a significant update to the earlier Non-Financial Reporting Directive (NFRD) aimed at addressing its limitations. While the NFRD required some large companies to report on non-financial issues, it lacked clarity and consistency and applied to a limited number of businesses.

Omnibus I Simplification: A Major Overhaul

In March 2026, the EU enacted the Omnibus I simplification as Directive (EU) 2026/470, significantly reshaping the CSRD's scope and requirements. This followed the earlier "Stop-the-Clock" Directive (2025/794) adopted in April 2025, which had delayed reporting timelines.

The key changes under Omnibus I include:

• Raised thresholds: The new mandatory thresholds require 1,000+ employees AND €450 million+ in net turnover (both conditions must be met), up from the original 250 employees / €50 million revenue / €25 million assets (two of three). This exempts approximately 80% of previously in-scope companies.
• Wave 1 (large PIEs, 500+ employees): Have been reporting since 2025 for FY2024. Companies no longer meeting the revised thresholds are temporarily exempt for FY2025–2026.
• Wave 2 (other large companies): Delayed by two years—first report due in 2028 for FY2027.
• Wave 3 (listed SMEs): Fully exempt, removed from scope entirely.
• Non-EU companies: With significant EU operations remain in scope under adjusted criteria.

Member states must transpose the revised CSRD requirements into national law by 19 March 2027.

Simplified Reporting Standards (ESRS)

On 3 July 2026, the European Commission adopted revised European Sustainability Reporting Standards (ESRS), substantially reducing the reporting burden:

• Mandatory datapoints reduced by over 60%
• Total datapoints reduced by over 70%
• A voluntary reporting standard was also adopted for companies not subject to the CSRD

These revised standards are subject to a European Parliament and Council scrutiny period (2+2 months) and will apply from financial year 2027. Companies must align their reports with the ESRS, which integrate other international frameworks like the Global Reporting Initiative (GRI), allowing companies to meet both European and global sustainability requirements.

What Remains Unchanged

Despite the scope reduction, the CSRD's core principles remain intact:

• Double materiality assessment remains central (ESRS 1, Sections 3.4–3.7)—companies must report on how sustainability issues affect their business and how their operations impact the environment and society
• Third-party assurance is still required for sustainability reports
• Digital format and annual management report integration continue to apply
• Reports must be included in a company's annual management report

ESG Reporting Requirements

Under the CSRD, companies are required to report on the three ESG pillars:

• Environmental: This includes data on climate change, pollution, biodiversity, and carbon emissions (Scope 1, 2, and 3, where relevant).
• Social: This covers human rights, working conditions, gender equality, diversity, and community engagement.
• Governance: Companies must disclose information on business ethics, anti-corruption efforts, corporate governance, and transparency in executive compensation.

Benefits and Impact

By improving the quality and transparency of sustainability data, the CSRD aims to build trust among stakeholders—investors, customers, or regulators. Reliable ESG data allows investors to make informed decisions, helps companies benchmark their performance, and ensures regulators can properly enforce sustainability laws. While the CSRD presents challenges, such as reporting costs, it also offers opportunities for companies to improve risk management, gain competitive advantages, and enhance their reputation.

The Omnibus I simplification has significantly reduced the compliance burden for smaller companies while maintaining rigorous standards for Europe's largest enterprises. Companies that fall below the new thresholds may still choose to report voluntarily using the new voluntary ESRS standard, which can provide competitive advantages in supply-chain partnerships and investor relations.

How Positive Organizations Can Help

At Positive Organizations, we can provide you with all the assistance you need to navigate the complexities of CSRD.

Compliance Assessment and Strategy Development involves conducting a thorough gap analysis to evaluate your current practices against the CSRD's requirements and identify areas for improvement. Based on this analysis, a customized roadmap outlines the steps needed to achieve compliance, including timelines and resource allocation. Additionally, support is provided in formulating ESG strategies that align with your business objectives and values.

ESG Regulatory Guidance ensures that your organization stays informed about the latest updates and changes in CSRD regulations, including the Omnibus I simplification and revised ESRS standards. Support is offered in interpreting complex regulatory requirements, ensuring compliance, and sharing industry best practices and benchmarks for effective ESG implementation.

Data Collection and Analysis: Assistance is provided in identifying relevant data sources and implementing efficient data collection methods. Once the data is gathered, it is analyzed to uncover trends, risks, and opportunities. Comprehensive sustainability reports are then prepared to meet the CSRD standards.

Stakeholder Engagement identifies key impacted stakeholders such as customers, employees, and institutions, and strategies are developed to engage them and address their concerns effectively. Additionally, assistance is provided in communicating your sustainability efforts and progress to these stakeholders.

Training and Workshops focus on enhancing skills within the organization. Training sessions are provided on ESG concepts, reporting requirements, and best practices while also raising employee awareness about the importance of sustainability. Capacity-building efforts help ensure that your organization has the necessary skills and resources to meet sustainability goals.

Finally, Assurance Services include helping organizations obtain limited or reasonable assurance for their sustainability reports, thereby enhancing credibility. This also involves verification to ensure the accuracy and consistency of the data being reported.