CSRD
Corporate Sustainability Reporting Directive
The CSRD has fundamentally changed sustainability reporting in Europe. For many companies, it is relevant not only because of a possible direct reporting obligation, but also because of growing requirements from the value chain, investors, banks and customers. Companies that assess their level of exposure early and approach the requirements in a structured way create clarity, reduce implementation risks and gain time to build robust data, processes and responsibilities.
Last updated: 24.04.2026
The CSRD at a glance
The Corporate Sustainability Reporting Directive (CSRD) provides the European legal framework for corporate sustainability reporting. It builds on the previous requirements of the Non-Financial Reporting Directive (NFRD) and requires standardised reporting on environmental, social and governance topics as part of the management report, based on the European Sustainability Reporting Standards (ESRS) and the principle of double materiality. Since 2025, the CSRD has been simplified and refocused: the deadlines for companies affected at a later stage have been postponed by two years, and the scope has been significantly narrowed so that it now focuses more strongly on very large companies. At the same time, protective mechanisms for smaller companies in the value chain have been introduced.
Companies in scope
The reporting obligation under the CSRD is being introduced in stages. Swiss companies that do business in the EU (for example through subsidiaries or branches) or are part of the supply chain of a company subject to reporting requirements may also be affected by the CSRD — either directly (if they have their own reporting obligation) or indirectly through information requests along the value chain.
According to the current position, the companies directly affected first are those that were already subject to the former NFRD. Transitional arrangements apply for the 2025 and 2026 financial years for some of these companies. For other groups of companies, the start of the CSRD reporting obligation has been pushed back in time:
- From financial year 2027, EU companies are expected to be subject to reporting requirements if they have more than 1,000 employees and net turnover of more than EUR 450 million.
- From financial year 2028, certain non-EU companies are also expected to fall within scope if they generate more than EUR 450 million in net turnover in the EU and have a substantial EU presence.
Listed SMEs are exempt from the CSRD obligation under the current legal framework.
Relevance for companies below the threshold
Even if a company does not fall directly under the CSRD reporting obligation, the directive may still be relevant in practice. Current legal developments explicitly aim to protect smaller companies in the value chain from disproportionate information requests. At the same time, the need for reliable sustainability data throughout the supply chain remains high.
This is where the Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME) is becoming increasingly important. The European Commission recommends that large companies and financial institutions base their information requests to SMEs as far as possible on this voluntary standard. For companies below the CSRD threshold, the VSME can therefore provide a meaningful and proportionate framework for supplying sustainability information in a structured way without having to build full ESRS reporting.
Reporting requirements
The CSRD requires standardised and transparent sustainability reporting on a company’s material environmental, social and governance topics. The starting point is double materiality. Companies must assess both the impact their business activities have on the environment and society, and which sustainability-related risks and opportunities are material to the company’s economic development. This analysis determines which topics, disclosures and metrics must be included in the reporting.
Reporting is carried out in accordance with the European Sustainability Reporting Standards. It is not designed as a separate sustainability report, but as part of the management report. This links it closely to financial reporting and means it must meet the same requirements for transparency, consistency and internal alignment.
In addition, the reporting is subject to external review with limited assurance. Companies must therefore prepare their disclosures in such a way that material statements, metrics, methods and assumptions are robustly documented and auditable. For companies within scope, this generally also includes disclosures under the EU Taxonomy. In the longer term, reporting is also intended to be digitally usable and comparable; the obligation for digital tagging will apply once the relevant technical requirements have been adopted.
Relevance for Swiss companies
The CSRD can also be directly relevant for Swiss companies. This is particularly the case if they operate in the EU through subsidiaries or branches and the relevant thresholds are reached there. The directive may also apply directly in future to certain non-EU companies if they generate sufficiently high turnover in the EU and have a substantial EU presence. Swiss companies with an international structure should therefore review this question at an early stage and on the basis of the current legal position.
In addition, indirect exposure is especially important for many Swiss companies. Companies that are part of the supply chain of a CSRD-reporting company or are integrated through group structures may already be required to provide ESG data today. In practice, the pressure to act therefore often arises not only from a company’s own reporting obligation, but from requirements driven by the market, financing and the value chain.
Note on developments in Switzerland
It remains plausible that regulatory requirements in Switzerland will, over the medium term, converge in part with EU requirements, or that market expectations (financing, customer requirements, tenders) will produce similar effects. Swiss companies — especially larger and internationally connected businesses — should therefore monitor developments closely and strengthen their internal ESG data and governance maturity at an early stage.
Swiss companies that are directly or indirectly affected by CSRD requirements should begin preparations early. This includes in particular: assessing the current state of ESG data, establishing clear responsibilities and processes, preparing a structured data collection process (including the value chain), and targeted training on requirements and evidencing capability.
Your next steps
Review whether you are affected
Many companies made their initial assessment based on the earlier CSRD logic. This review should now be updated based on the current legal position. The key is to distinguish clearly between direct and indirect exposure.
Clarify relevant requirements and internal responsibilities
Once your level of exposure has been assessed, the next step is to determine which requirements are actually relevant for your company. This also includes defining responsibilities, data sources and internal workflows at an early stage.
Define a proportionate implementation path
Not every company needs to implement all requirements in full depth immediately. What makes sense is an approach that fits your starting point and builds the material topics, metrics and evidence step by step on a robust basis.
How our services support you
We support companies in assessing and implementing the CSRD in a technically sound way and with proportionate effort. This starts with the question of whether, and to what extent, your company is directly or indirectly affected. Building on that, we help translate the relevant requirements into a practical project set-up and develop reporting that is both regulatorily robust and operationally workable.
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FAQs about the CSRD
Double materiality means that companies assess and report sustainability topics from two complementary perspectives:
Impact materiality:
How your company’s activities actually or potentially affect the environment and society—for example greenhouse-gas emissions, resource use, working conditions, or human rights impacts across the value chain.Financial materiality:
How environmental and social matters affect your company’s financial position and performance—for example through climate-related risks, supply-chain disruptions, regulatory requirements, market shifts, or reputational risk.
Both dimensions are central to CSRD reporting, because together they provide a complete picture: your company’s impacts on people and the planet, and the sustainability-related risks and opportunities that can influence the business.
The EU Taxonomy is the EU’s classification system that defines which economic activities can be considered environmentally sustainable (i.e., “taxonomy-eligible” and “taxonomy-aligned”).
CSRD and the EU Taxonomy are closely connected because:
The CSRD/ESRS set the overall framework for sustainability reporting, while the EU Taxonomy covers a specific, more technical part of that reporting—namely the classification and quantification of environmentally sustainable activities.
Companies that are subject to the EU Taxonomy disclosure requirements (Article 8 of the EU Taxonomy Regulation) must include these disclosures within their CSRD sustainability statement (as part of the management report/annual reporting package) and follow a standardised presentation.
In practice, this means companies must disclose to what extent their activities are:
taxonomy-eligible (eligibility), and
taxonomy-aligned (alignment),
typically using key performance indicators such as turnover, CapEx, and OpEx, supported by explanatory information on methodology and criteria (including “Do No Significant Harm” and minimum safeguards).
Important context:
Being in scope of the CSRD does not automatically mean a company must publish a full set of EU Taxonomy KPIs in every case—the determining factor is whether it falls under the Taxonomy disclosure obligations. In practice, however, CSRD and Taxonomy reporting are tightly linked, because Taxonomy disclosures are commonly expected to be integrated into the CSRD reporting process and aligned with the broader ESRS narrative.
The ESRS are the mandatory rulebook for implementing the CSRD. They specify what sustainability information companies must disclose and how it must be structured, explained and presented—so that sustainability statements are comparable, auditable and consistent across companies and sectors.
In practical terms, this means:
Standardised content and structure: The ESRS set out common requirements for disclosures across Environmental, Social and Governance topics, including governance arrangements, strategy, targets, action plans and metrics.
Core principles and methodology: The cross-cutting standards (notably ESRS 1 and ESRS 2) embed key concepts such as double materiality, the reporting boundary, and baseline disclosures that apply to all in-scope companies.
Auditability and data quality: By defining minimum expectations for the underlying data, assumptions, consistency and traceability, the ESRS provide the foundation for external assurance of sustainability reporting.
Current simplification work: As part of the EU’s simplification agenda, the ESRS are being reviewed and streamlined. EFRAG delivered technical advice on simplified ESRS to the European Commission on 3 December 2025, as an input to the next regulatory steps.
To make your sustainability reporting CSRD-compliant, auditable and consistent, it helps to follow a structured approach:
Use the ESRS as your rulebook:
Align the structure, content and evidence trail of your reporting with the ESRS (including ESRS 1/2: core principles, governance, strategy, IROs, policies, targets and metrics). Keep in mind that the ESRS are currently being reviewed/streamlined, and adjust your approach where necessary.Carry out and document double materiality properly:
Ensure your materiality assessment (impact + financial materiality) is methodologically sound and fully traceable (stakeholder input, scoring, thresholds, decisions). The documentation is crucial later for assurance.Perform a gap analysis (current state vs required state):
Compare your existing data, processes and controls against ESRS requirements. Identify gaps in:data availability (e.g. emissions scopes, workforce data, value-chain data)
roles, responsibilities and governance
evidence and data quality
systems, workflows and consolidation processes
Consider the EU Taxonomy where applicable:
Assess early whether and how EU Taxonomy disclosures apply (eligibility/alignment, KPIs such as turnover/CapEx/OpEx) and build the data collection in parallel with ESRS reporting.Involve external assurance early (not at the end):
Ask your assurance provider/auditor to challenge key methodological choices early (materiality, KPIs, reporting boundaries, data collection approach) so that fundamental issues are not discovered late. Starting with a readiness review or a “dry-run” assurance exercise is often effective.
Machine readability means that sustainability disclosures are not only readable for people as narrative text, but are also structured so that software can automatically extract, analyse and compare the reported information.
How this is implemented under the CSRD:
Electronic Reporting Format (ESEF):
Sustainability disclosures will become part of the (group) management report and must be provided in an electronic format that is both human-readable and machine-readable – in practice: XHTML (human-readable) plus digital tagging via XBRL.Important: Tagging will only become mandatory once the EU taxonomy has been formally adopted:
The obligation to use digital tagging (and thus ensure full machine readability) will only take effect once the EU makes the relevant XBRL taxonomy binding by amending the ESEF regulation. Until then, tagging (and thus, as a rule, XHTML for the management report) is not mandatory.
Under the CSRD, sustainability disclosures must be included as a clearly identifiable, dedicated section of the (group) management report (the “sustainability statement”) and should not be published as a separate standalone report, because this would weaken the intended connectivity between financial and sustainability information.