7 steps to CSRD compliance for EU and UK businesses | One Click LCA

What is the Corporate Sustainability Reporting Directive (CSRD)?

The Corporate Sustainability Reporting Directive (CSRD) introduces mandatory sustainability reporting standards for organisations operating in or engaging with the European Union (EU) and European Economic Area (EEA). Compliance with the CSRD relies on adherence to the European Sustainability Reporting Standards (ESRS).

Omnibus I Directive and revised ESRS changes

The rules changed substantially in 2026 with two major updates:

1. Omnibus I Directive (EU) 2026/470: In force since March 18, 2026. It narrows the CSRD scope to companies with more than 1,000 employees and over €450 million in net turnover. Companies outside the new scope can still report voluntarily using the EU voluntary standard, and many will keep receiving sustainability data requests from customers that remain in scope.
   
   

2. Revised ESRS and voluntary standard: On July 3, 2026, the European Commission adopted the revised European Sustainability Reporting Standards (ESRS), cutting mandatory datapoints by 61%. It also introduced a voluntary reporting standard for smaller companies. Both delegated acts await scrutiny by the European Parliament and the Council before they become binding. 

Status of the revised ESRS standards

Both revised ESRS and voluntary standard are under scrutiny by the European Parliament and the Council for two months, extendable by a further two. Revised ESRS are expected to enter into force in November 2026, and the voluntary standard the third day after publication in the Official Journal.

The revised ESRS cut mandatory datapoints by 61% compared with the 2023 standards, based on EFRAG's technical advice. They apply from financial year 2027. Companies already reporting can apply them voluntarily for financial year 2026, or keep the 2023 standards with selected reliefs. Either way, the sustainability statement must state which standards version it follows.

Who must comply with the CSRD, and from when?

• EU companies and EU-listed issuers with more than 1,000 employees and net turnover above €450 million. Both thresholds must be met. These companies report under the new rules for financial years starting on or after January 1, 2027, and publish their first reports in 2028.
• Non-EU parent companies with more than €450 million net turnover generated in the EU for each of the last two consecutive financial years, and either a qualifying EU subsidiary or an EU branch exceeding €200 million in turnover. For calendar-year companies, the first report is due in 2029 for financial year 2028.
• Companies already reporting since financial year 2024 that fall below the new thresholds: Member States may exempt them for financial years 2025 and 2026. Whether and when this exemption applies depends on transposition in each Member State.
• Exempt: listed small and medium enterprises (SMEs) are no longer in mandatory scope. They can report voluntarily using the EU voluntary standard.

In its CSRD staff working document, the European Commission estimates that the new thresholds remove about 85% of companies from mandatory scope, leaving roughly 6,750 of the EU's largest companies subject to CSRD reporting. Member States must transpose the directive into national law by March 19, 2027.

Does the CSRD apply to UK companies?

The CSRD is an EU directive, but it can affect UK companies with significant business operations or securities listings in the EU. .UK companies can be subject to CSRD in one of two ways, independently of where the company is headquartered.

CSDR as a non-EU parent company

A UK parent undertaking falls under the CSRD’s third-country reporting route when:

• It generated more than €450 million in net turnover in the EU in each of the last two financial years.
• An EU subsidiary — qualifying as a large undertaking or listed SME under the amended Accounting Directive — generated more than €200 million in net turnover in the previous financial year.
• If there is no qualifying EU subsidiary, an EU branch generated more than €200 million in the previous financial year.

The EU subsidiary or branch publishes the report, covering the UK parent’s group. First reports are due in 2029 for the financial year 2028.

CSDR as an EU subsidiary, EU parent, or listing

• An EU subsidiary of a UK group may have to report in its own right if it meets the general thresholds: more than 1,000 employees and over €450 million in net turnover.
• A UK subsidiary with an EU parent may need to feed data into the parent's consolidated sustainability statement if the EU parent is in CSRD scope., . The UK entity does not file separately, the EU parent holds the reporting obligation..

A UK company without an EU subsidiary, an EU branch, or an EU-regulated listing does not fall within CSRD scope directly. It can still receive sustainability data requests from customers, lenders, or investors that are in scope, subject to the value chain cap described above.

The UK's own framework: UK Sustainability Reporting Standards (UK SRS)

The UK is not adopting the CSRD or the ESRS. It is building a separate disclosure framework based on global standards. On February 25, 2026, the Department for Business and Trade published two final UK Sustainability Reporting Standards (UK SRS):

1. UK SRS S1, covering general sustainability-related financial disclosures.
2. UK SRS S2, covering climate-related disclosures.

Both standards adopt IFRS S1 and IFRS S2, issued by the International Sustainability Standards Board, with UK-specific amendments. They are currently available for voluntary use.

Mandatory use needs additional rules. The Financial Conduct Authority has proposed mandatory UK SRS S2 climate reporting for certain listed companies from financial years beginning on or after January 1, 2027. The consultation also included a comply-or-explain approach to Scope 3 emissions and other sustainability-related disclosures. A final policy statement is expected in autumn 2026.

UK SRS and the CSRD remain separate frameworks, with distinct legal bases, different standards, and independent regulators. UK SRS has not been recognized as equivalent to ESRS, so voluntary UK SRS reporting does not currently replace CSRD reporting.. Equally, CSRD compliance does not remove any UK SRS obligations the FCA introduces once its policy statement is finalised.

UK groups tracking both frameworks: One Click LCA's CSRD compliance solution generates ESRS-aligned reporting for group-level compliance, drawing on the same emissions and resource-use data that UK SRS S2 climate disclosures require.

How Omnibus changed the original CSRD

7 steps to CSRD compliance

1. Assess sustainability impacts in alignment with European Sustainability Reporting Standards (ESRS)

Under the CSRD, companies are required to identify and assess sustainability impacts, risks, and opportunities according to the European Sustainability Reporting Standards (ESRS). This includes evaluating the environmental, social, and governance (ESG) impacts of their operations, as well as their entire value chain — spanning both suppliers (upstream) and customers (downstream), including indirect relationships.

The ESRS framework includes five environmental, four social, and one governance standards. One Click LCA supports analysis in areas such as:

• Climate change
• Pollution
• Water and marine resources
• Biodiversity and ecosystems
• Resource use and circular economy

Omnibus updates:

• CSRD reporting obligations now apply only to companies with more than 1,000 employees and over €450 million in net turnover.
• The value chain cap is now law. Companies in your value chain with up to 1,000 employees have a right to decline sustainability data requests that go beyond the essential disclosures of the EU voluntary standard, once this is implemented. If you request more, you must tell the supplier which extra information you are asking for and that it can refuse. The cap covers data requests made for CSRD reporting only: it does not restrict voluntary data sharing that is common in a sector, and it does not affect product-level data such as Environmental Product Declarations requested under procurement, the Construction Products Regulation, or the Ecodesign for Sustainable Products Regulation.
• The obligation to adopt sector-specific ESRS has been removed. The Commission may publish optional sector guidance instead.

2. Determine which impacts are material: Impact- and finance-wise

The ESRS defines material sustainability impacts as follows:

• For actual (current) impacts, materiality is based on their severity, which considers the impact's scale, scope, and irremediable nature (for negative impacts only).
• For potential impacts, materiality is determined by both their severity and likelihood.

Companies establish their own thresholds for impact materiality. Exclusions must be disclosed and are subject to limited assurance engagement.

Financial materiality exists when a sustainability matter generates, or could reasonably be expected to generate, material financial effects for the company. This includes risks or opportunities that could materially influence future development, financial position, performance, cash flows, access to finance, or cost of capital. All impacts must be evaluated over the following timeframes:

• Short-term: One reporting year.
• Medium-term: Up to five years.
• Long-term: Beyond five years.

The process for identifying material impacts must be documented in accordance with IRO-1, which outlines the methodology for assessing material impacts, risks, and opportunities.

Omnibus updates:

• The revised ESRS simplify the double materiality assessment. A top-down approach lets you anchor the assessment in your strategy and business model instead of assessing every individual impact, risk, and opportunity.
• Companies shall not report information that is not material, except in clearly defined circumstances. Materiality is now the explicit filter for every disclosure.

3. Quantify the material data points

Omnibus updates:

• The revised ESRS cut mandatory datapoints by 61%, and prioritise quantitative datapoints over narrative text.
• You can define your GHG reporting boundary using either the financial control or the operational control approach, aligning ESRS reporting with global standards.
• Mandatory sector-specific indicators will not be introduced. The Commission may issue optional sector guidance.

4. Report the mandatory ESRS data points

The following two standards are mandatory for reporting: ESRS 1 (General Requirements) and ESRS 2 (General Disclosures).

Omnibus updates:

• The obligation to adopt sector-specific ESRS has been removed by the Omnibus I Directive.

5. Create your sustainability statement

ESRS specifies the minimum requirements and structure for the sustainability statement. This statement must be be included in a dedicated, clearly identifiable section of the management report.

Omnibus update:

• The sustainability statement remains mandatory for companies in scope. The revised ESRS remove non-material and least decision-useful disclosures, so statements become shorter and more focused.

6. Get your sustainability statement audited

Sustainability statements must undergo an audit, with the level of limited assurance. The statutory auditor typically performs the audit, but other authorised auditors in EU member states may also undertake the task. The statutory auditor is required to present the findings in an assurance report, along with an opinion aligned with assurance standards once adopted by the European Commission.

Omnibus updates:

• Limited assurance is now the assurance level. The Omnibus I Directive removes the possibility of escalating to reasonable assurance, reducing assurance complexity and cost.

7.  Publish your sustainability statement

CSRD reports will need to be submitted in a machine-readable format with data tagged for automated processing. This technical format is based on XBRL and adheres to the European Single Electronic Format (ESEF) standards.

Omnibus updates:

• Mandatory digital tagging is postponed until the Commission adopts detailed specifications, so companies do not need XBRL-tagged sustainability statements yet.

What is still pending for the CSRD?

The Omnibus I Directive is final law. Two items remain in motion:

• Revised ESRS and the voluntary reporting standard. Both delegated acts are under scrutiny by the European Parliament and the Council for two months, extendable by a further two. If neither institution objects, they are expected to enter into force in November 2026 and apply from financial year 2027, with voluntary early application of the revised ESRS for financial year 2026. Once the voluntary standard enters into force, it replaces the 2025 VSME Recommendation.
• National transposition. Member States must transpose the CSRD amendments by March 19, 2027. Timing of the Wave 1 transition exemption for financial years 2025 and 2026 depends on each Member State.

One Click LCA monitors these milestones and updates this guide as they complete.

Frequently asked questions about CSRD

Who must comply with the CSRD after the Omnibus?

EU companies and EU-listed issuers with more than 1,000 employees and net turnover above €450 million. Both thresholds must be met. The rules apply for financial years starting on or after January 1, 2027, with first reports in 2028. The European Commission estimates about 6,750 companies remain in scope, roughly 15% of the original population.

What is the CSRD value chain cap?

A legal limit on the sustainability data that CSRD reporters can require from value chain companies with up to 1,000 employees. These companies can refuse requests that go beyond the essential disclosures of the EU voluntary standard, and reporters who ask for more must say so and flag the right to decline.

The cap covers CSRD reporting data only. Environmental Product Declaration (EPD) and other product data requests under the CPR, ESPR, or procurement are unaffected.

When do the revised ESRS apply?
From financial years starting on or after January 1, 2027, provided the European Parliament and the Council raise no objection during the ongoing scrutiny period. Companies already reporting can apply them voluntarily for financial year 2026, or keep the 2023 standards with selected reliefs. Each sustainability statement must state which version of the standards it applies.

Do companies outside the CSRD scope still need sustainability data?

In practice, yes. Customers, banks, and investors keep requesting sustainability information, and the EU voluntary standard gives companies with up to 1,000 employees a single, recognized format for answering them. Product-level requirements such as EPDs and product carbon footprints under the CPR, ESPR, and CBAM apply independently of CSRD scope.