CSRD Scope

The scope of the Corporate Sustainability Reporting Directive (CSRD) defines which companies are required to report on sustainability under the European Sustainability Reporting Standards (ESRS). Three size criteria are decisive: balance sheet total, net turnover and the average number of employees during the financial year. A company qualifies as large, and is therefore generally subject to the reporting obligation, if it exceeds at least two of the three thresholds on two consecutive balance sheet dates. In Germany these rules are implemented by amending the Commercial Code (HGB); the EU thresholds were also raised by a delegated directive to account for inflation.

The CSRD phases in the reporting obligation over time. In the first wave, large public-interest entities with more than 500 employees that were already subject to the earlier NFRD report from financial year 2024 (reports published in 2025). In the second wave, all other large companies that meet at least two of the three criteria (balance sheet total above 25 million euros, net turnover above 50 million euros, more than 250 employees) follow from financial year 2025. From financial year 2026 the directive captures listed small and medium-sized enterprises (with an opt-out until 2028) as well as certain third-country undertakings with substantial EU turnover.

The concrete scope is currently in flux: with the so-called Omnibus package, the European Commission proposed in February 2025 to postpone the second and third waves (stop-the-clock) and to raise the thresholds significantly to 1,000 employees. Companies should therefore review the current state of transposition into national law and document their expected first year of application. Determining scope early is crucial, because the obligation entails extensive preparatory work: a materiality assessment, data collection along the value chain and external assurance, initially at a limited assurance level.