What is the CSRD Directive

The CSRD Directive (EU 2022/2464) is the regulation governing sustainability reporting in Europe, replacing the previous NFRD.

Its objective is to make ESG information:

• more transparent

• more comparable

• more reliable

To achieve this, it introduces a fundamental change: the sustainability report becomes an integral part of corporate reporting, on par with financial data.

This means companies must include structured information in their management report covering:

• environmental impacts

• social aspects

• governance

The CSRD therefore marks the transition from a voluntary approach to a regulated and auditable system.

What changes with the CSRD compared to the past

Compared to previous regulation, the CSRD introduces three key elements that significantly transform ESG reporting.

Greater depth of data

Companies must move beyond qualitative statements and provide measurable data, including:

• GHG emissions (Scope 1, 2, and 3)

• decarbonization targets

• ESG KPIs

Introduction of ESRS standards

Reporting must follow the ESRS (European Sustainability Reporting Standards), developed by EFRAG, which define what and how to disclose.

Mandatory audit

ESG information must be verified by third parties, increasing data reliability.

In short, the CSRD turns ESG reporting into a structured process similar to financial reporting.

CSRD and double materiality: the most significant change

One of the most innovative aspects of the CSRD is double materiality.

Before CSRD, companies mainly assessed their impact on the environment and society. Today, they must also consider the reverse:

• how the company impacts the environment and society

• how environmental and social factors impact the company

This second dimension is particularly important because it introduces sustainability as a financial risk and opportunity.

For example, CO₂ emissions are not only an environmental issue but can also lead to:

• future costs (carbon tax, CBAM)

• operational risks

• loss of competitiveness

Double materiality makes sustainability a core element of business strategy, not just communication.

Which companies are required to comply with CSRD (2026 update)

One of the most discussed aspects of the CSRD is its scope, which has been revised through the Omnibus package.

Initially, the directive was expected to apply to around 50,000 companies. However, the simplifications introduced in 2025 significantly reduced the number of companies directly affected.

New thresholds (post-Omnibus)

The CSRD will mainly apply to:

• EU companies with more than 1,000 employees and €450 million in turnover

• non-EU companies generating at least €450 million in turnover within the EU

This reduction does not mean that ESG data is becoming less important.

On the contrary, market players — especially banks and investors — are increasingly requiring sustainability data even from companies not formally in scope, making ESG reporting effectively a market standard.

CSRD timeline and the “stop-the-clock” directive

The implementation of the CSRD has been accompanied by important changes in timelines.

In 2025, the “stop-the-clock” directive postponed reporting obligations by two years for certain groups of companies (wave 2 and wave 3).

This means:

• some companies have gained more time to prepare

• others may exit the mandatory scope if they do not meet the new thresholds

Companies already included in the first wave (large listed companies) continue reporting without interruption.

The current phase is therefore a transition period, during which companies must prepare for requirements that will continue to evolve.

The role of ESRS in CSRD

The ESRS (European Sustainability Reporting Standards) are the operational core of the CSRD.

They define in detail:

• which ESG data must be collected

• how it should be structured

• how it should be disclosed

The standards cover:

• environmental topics (climate, resources, biodiversity)

• social aspects

• governance

In 2026, a revision of the ESRS is underway, aiming to:

• reduce the number of required datapoints

• simplify implementation

• maintain a high level of reporting quality

This shows that the regulation is still evolving, but clearly moving toward greater standardization.

Why CSRD is important for companies (even if not mandatory)

Even for companies not directly subject to CSRD, the directive represents a structural shift.

The reason is simple: the market is moving in the same direction as regulation.

Pressure from financial institutions

New European guidelines require banks to assess ESG risks of their clients.

Supply chain requirements

Companies subject to CSRD must collect ESG data from suppliers, extending requirements across the value chain.

Access to finance

ESG performance increasingly influences:

• credit conditions

• ratings

• investment decisions

In this context, even a voluntary sustainability report becomes a strategic tool.

Key operational challenges of CSRD

Complying with CSRD is not just about producing a report — it requires building an internal ESG data management system.

The main challenges include:

• fragmented data across multiple departments

• Scope 3 emissions management

• supplier and value chain engagement

• audit readiness

Many companies realize that the real challenge is not reporting itself, but structuring data upstream.

How Metrikflow supports CSRD compliance

Metrikflow helps companies turn CSRD from a complex obligation into a structured and manageable process.

The platform enables you to:

• centralize ESG data

• calculate Scope 1, 2, and 3 emissions

• manage data collection across the supply chain

• align with ESRS standards

• generate audit-ready reports

The result: a more efficient process, more reliable data, and sustainability fully integrated into business operations.