The CSRD is one of the most significant sustainability-related directives introduced in recent years. It aims to hold companies to a high level of accountability for their social, environmental, and governance impacts. However, the directive has undergone substantial revision through the EU's Omnibus I simplification package, signed into law in February 2026. The scope, thresholds, and timelines have all changed considerably, and if you were tracking the original framework, much of what you knew needs to be updated.

This article addresses common questions about the CSRD, giving an up-to-date overview of the reporting requirements, the revised scope and timeline, and what this means for companies across the supply chain.

What is the CSRD?

The Corporate Sustainability Reporting Directive (CSRD) is a standard introduced by the European Union to enable companies to report on their Environmental, Social, and Governance (ESG) performance. It is an extension of the Non-Financial Reporting Directive (NFRD), which encouraged companies to reflect on and improve their impact on people and the planet.

The CSRD significantly expands reporting standards, identifying specific topics that companies are obligated to address. These include climate change mitigation, biodiversity, human rights, and the circular economy. Those subject to the CSRD must produce annual sustainability reports outlining their measurement of and progress on ESG factors.

What Does This Mean for Companies?

The CSRD requires greater accountability from companies and their supply chains. Where the NFRD only required companies to report on their immediate operations, the CSRD encourages organisations to look deeper, across their suppliers, partners, and broader operating environment.

In practice, reporting follows the European Sustainability Reporting Standards (ESRS), which set out the specific factors companies must address in their annual sustainability reports. These include a transition plan for climate change mitigation, measurement of workers' rights, and the gender pay gap, among others. The directive creates a level playing field, ensuring operations are transparent for consumers and stakeholders alike.

Importantly, even companies that fall outside the formal reporting scope are likely to feel the effects. Large in-scope organisations are expected to gather ESG data from their suppliers, meaning businesses operating within larger supply chains may receive requests for sustainability information from their buyers regardless of their own reporting obligations.

Under the Omnibus I reforms, suppliers with fewer than 1,000 employees now have the right to decline information requests that go beyond voluntary reporting standards, offering some protection against disproportionate data demands from larger partners.

Who is in Scope?

Following the Omnibus I reforms, the CSRD's scope has been significantly narrowed compared to the original framework.

European Companies

The directive now applies to companies that meet both of the following thresholds:

• More than 1,000 employees

• More than €450 million in net annual turnover

This replaces the previous tiered structure based on 250 or 500 employees. Listed SMEs are no longer automatically in scope under the revised rules.

Non-European Companies

Non-EU companies remain in scope if they have branches or subsidiaries inside the EU with a combined group-level turnover in the EU of more than €450 million. Companies with listed securities on a regulated EU market may also be subject to requirements depending on their size.

Revised Compliance Timeline

The reporting timeline has shifted significantly as part of the Omnibus I reforms:

Wave 2 companies now have two additional years compared to the original schedule, and listed SMEs have effectively been removed from mandatory scope altogether.

What is the Objective of the CSRD?

The CSRD was created to compel companies to disclose information on their sustainability-related risks and opportunities, based on the impact of their activities on both people and the environment. It aims to level the playing field between companies, ensuring transparency on sustainability performance for all stakeholders.

Companies subject to the CSRD must report according to the ESRS, a set of qualitative and quantitative data points that guide the reporting process. Following the Omnibus I simplification, the number of mandatory datapoints has been reduced by around 61%, making the framework more focused. Third-party auditing remains a requirement, providing independent assurance of the information reported.

How Simvia Can Help

At Simvia, we support our customers throughout their CSRD compliance journey. The Simvia platform streamlines compliance processes across the entire supply chain, making it straightforward to request and collect ESG data from suppliers in line with CSRD requirements. Simvia helps identify sustainability risks based on regional and product data that aligns with impact measurement criteria — keeping you prepared as the regulatory landscape continues to evolve.

Get in touch with our team today to find out more about how Simvia can support your CSRD compliance.

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