Why the CSRD scope question matters right now
Few pieces of EU law have changed as quickly as the rules on corporate sustainability reporting. The Corporate Sustainability Reporting Directive (CSRD) originally promised to bring tens of thousands of companies into detailed, audited sustainability reporting. Then came the “Omnibus” simplification drive, which has sharply narrowed who has to comply and pushed back key deadlines. For finance teams and boards, the practical question in 2026 is simple but urgent: does your company still fall within CSRD, and what should you do now?
Getting this wrong is expensive in both directions. Companies that assume they are exempt may miss obligations that still apply, while those that over-prepare may spend heavily on reporting they no longer need.
What CSRD was designed to do
The CSRD is Directive (EU) 2022/2464. It requires in-scope companies to report on sustainability matters – environmental, social and governance – using the European Sustainability Reporting Standards (ESRS). Two features define it: “double materiality”, meaning companies report both how sustainability issues affect them and how they affect people and the environment; and mandatory assurance, so the information is independently checked rather than self-declared.
The reporting was designed to be phased in over several “waves”, starting with the largest listed companies and extending to other large companies, listed small and medium-sized enterprises, and certain non-EU groups.
The Omnibus changes: stop the clock and narrower scope
In 2025 the EU moved to simplify these rules through the Omnibus I package. It has two main effects on CSRD.
Stop the clock
A “stop-the-clock” directive, adopted in 2025, postponed by two years the reporting obligations for the companies in the later waves – broadly, large companies that were not already reporting, and listed SMEs. Companies that were already required to report for the 2024 financial year generally continued to do so.
A much smaller scope
The substantive Omnibus reform, on which the EU institutions reached agreement in December 2025, significantly raises the thresholds. The aim is to limit mandatory CSRD reporting to companies with more than 1,000 employees that also meet a financial threshold (a net turnover above roughly €450 million), and to remove listed SMEs from scope altogether. The related due diligence rules under the CSDDD are similarly narrowed to the very largest companies.
Because these changes were still being finalised and transposed into national law, companies should confirm the exact thresholds and timing that apply in their own member state rather than rely on earlier drafts.
Practical example: a mid-sized manufacturer
Consider a manufacturer with 700 employees and turnover of €300 million that had been preparing for CSRD reporting. Under the original rules it would likely have been in a later wave. Under the revised, higher thresholds it may now fall outside mandatory scope entirely. That does not mean sustainability data is irrelevant – its banks, investors and large customers may still ask for it – but the legal obligation, and the cost of full ESRS reporting and assurance, may no longer apply. Confirming this early avoids wasted effort.
Common mistakes companies make
The biggest mistake is acting on outdated information – the scope in 2026 is very different from the original 2022 directive. Some companies halt all sustainability work on hearing about “simplification”, only to find that customers, lenders and investors still demand the data. Others forget that being out of mandatory scope does not remove obligations under other laws, such as the EU Taxonomy where it applies, or contractual and financing commitments. A further error is assuming EU-wide uniformity: the directive must be transposed nationally, and timing can vary.
Recommended actions
Reassess your position against the revised thresholds and confirm whether you remain in mandatory scope. Track how your own member state transposes the changes, as the legal detail becomes binding at national level. If you fall out of scope, decide what voluntary reporting still makes commercial sense for your investors, lenders and customers – a proportionate, standards-based approach can be valuable without the full compliance burden. If you remain in scope, continue building your ESRS reporting and assurance readiness. In all cases, keep your board informed, because the strategic and financing implications go well beyond compliance.
Frequently asked questions
Has CSRD been abolished?
No. CSRD remains in force, but the Omnibus reforms have delayed deadlines and substantially reduced the number of companies required to report.
We are a listed SME – do we still have to report?
The reforms move to remove listed SMEs from mandatory scope, but you should confirm the final position under your national transposition before deciding.
Should we stop our sustainability reporting work?
Not necessarily. Even if you fall outside mandatory scope, investors, banks and large customers may still expect sustainability information from you.
Conclusion
The CSRD landscape in 2026 is defined by simplification: later deadlines and far fewer companies in mandatory scope after the Omnibus reforms. The right response is neither panic nor complacency but a clear reassessment – confirming whether you are in or out of scope, watching national transposition, and making a deliberate decision about voluntary reporting where it adds value. At Lawgent, we help companies interpret the evolving CSRD rules, assess their obligations accurately and design a proportionate, future-proof approach to sustainability reporting. Contact us to clarify exactly where your company stands.
