⚠️ Regulatory status at 16 October 2026. Directive (EU) 2026/470, the Omnibus I directive, was published in the Official Journal on 26 February 2026; its EUR-Lex record gives 18 March 2026 as the date of entry into force. It reaches companies through national law: according to law-firm briefings, Member States have until 19 March 2027 to transpose its accounting and CSRD provisions. The revised ESRS, Delegated Regulation (EU) 2026/1563, were published on 21 September 2026 and enter into force on 10 November 2026. Before any filing decision, check how your own Member State has implemented the rules.
CSRD scope now depends on two cumulative thresholds: an EU undertaking must report only if it exceeds both 1,000 average employees and €450 million of net turnover. Omnibus I replaced the former two-of-three size test, deleted the reporting regime for listed SMEs and raised the bar for non-EU groups. For most new reporters, the first financial year is now 2027. How many companies drop out is still a matter of estimate rather than official count: the European Commission put the reduction at about 80% when it tabled the proposal in February 2025, and Ropes & Gray put it at about 90% after the December 2025 political agreement (both as reported by ESG Dive, 2025 and ESG Dive, 9 December 2025).
This guide deals with one question: does the reporting obligation fall on your entity, and from which financial year? Where we could read the operative text of the directive on EUR-Lex, we quote it directly; where we could not, we rely on the briefings of the law firms that tracked the file and say so. What the standards require once you are in scope is covered in our ESRS guide.
Quick answer. An EU undertaking is in CSRD scope if it exceeds both 1,000 average employees and €450 million net turnover; an EU parent applies the same test to its group on a consolidated basis. The first financial year is 2027, reported in 2028. Listed SMEs are no longer subject to mandatory reporting. A non-EU group is caught under Article 40a when its EU net turnover exceeds €450 million in each of the last two financial years and it has an EU subsidiary or branch with more than €200 million of net turnover; law firms report a start with financial year 2028. Companies that reported for FY2024 and now fall below either threshold may be exempted for FY2025 and FY2026, but only if their Member State uses that option.
Who should read this
- Sustainability and ESG reporting leads
- Group CFOs and financial controllers
- Legal, company secretarial and compliance teams
- Non-EU parents with EU subsidiaries or branches
- Auditors and assurance providers
- Suppliers receiving customer ESG questionnaires
🔑 Key takeaways on CSRD scope
- Both thresholds, never one. More than 1,000 average employees and more than €450 million net turnover; the balance-sheet criterion no longer plays a role.
- Listed SMEs are out of mandatory reporting; they may still report voluntarily.
- First-wave reporters are not released automatically. Member States may exempt them for FY2025 and FY2026; until national law does so, existing obligations stand.
- For EU undertakings, EU Taxonomy reporting follows CSRD scope, because Article 8 of the Taxonomy Regulation applies to undertakings reporting under Articles 19a and 29a of the Accounting Directive; the position for non-EU groups under Article 40a is not settled here.
- Suppliers with up to 1,000 employees are protected by a value chain cap: customers may not require more information, for CSRD purposes, than the voluntary standard specifies.
On this page
The CSRD Scope Test After Omnibus I: Two Cumulative Thresholds
The change that matters most is in the logic of the test, not only in its numbers. Under the original directive, Directive (EU) 2022/2464, the obligation applied to large undertakings within the meaning of Article 3(4) of the Accounting Directive, i.e. those exceeding at least two of three criteria: 250 employees, net turnover and balance-sheet total. The 2023 inflation adjustment raised the last two to €50 million and €25 million (Delegated Directive (EU) 2023/2775). Omnibus I replaces that alternative with a cumulative condition. Article 19a(1) of the Accounting Directive now covers undertakings that “exceed a net turnover of EUR 450 000 000 and an average number of 1 000 employees during the financial year”; Article 29a(1) applies the same figures to a parent “on a consolidated basis” (Directive (EU) 2026/470, Art. 2(4) and 2(5)).
Figure 1. The size test before and after Omnibus I.
Because both conditions must now be met, many companies that used to qualify as large drop out. A labour-intensive manufacturer with 3,000 employees and €300 million of turnover fails the turnover condition. A trading company with 400 employees and €900 million of turnover fails the headcount condition. Under the old test, both would have been large undertakings.
Figure 2. Four illustrative companies against both thresholds.
⚠️ Measure the right numbers. The employee figure is the average over the financial year, not the headcount on the balance-sheet date. Turnover means net turnover. A parent tests its group on consolidated figures. A scope assessment made in 2024 under the two-of-three test cannot simply be reused: redo it on your latest accounts.
A Decision Tree for CSRD Scope
The legal tests for CSRD scope can be read as a short sequence of questions. The figure puts the most common exits first. It is a reading aid; on a borderline case, it does not replace advice from counsel.
Figure 3. CSRD scope decision tree.
One point is easy to miss: CSRD scope is assessed entity by entity. A non-EU group that fails the Article 40a test can still own an EU subsidiary that exceeds both EU thresholds on its own figures, and that subsidiary then has its own obligation.
Test your own entity. Our Omnibus scope self-test lets you run your own figures through a CSRD scope check in a few minutes.
CSRD Scope Categories After Omnibus I
| Category | Test | First financial year | Source |
|---|---|---|---|
| EU large undertakings | > 1,000 average employees AND > €450m net turnover | FY2027 (report in 2028) | Directive 2026/470; Deloitte |
| EU parent undertakings | Same thresholds, on a consolidated basis | FY2027 | Directive 2026/470 |
| Non-EU groups (Article 40a) | > €450m EU net turnover in each of the last two years AND an EU subsidiary or branch with net turnover > €200m in the preceding year | FY2028 (report in 2029) | Directive 2026/470 (thresholds); Covington (start date) |
| Listed SMEs | — | Mandatory regime deleted | Directive 2026/470, Art. 2(7); Weil |
For listed SMEs, the directive deletes Article 29c of the Accounting Directive, which held their simplified reporting regime (Directive (EU) 2026/470, Art. 2(7)). Weil’s summary is blunt: “listed small and medium-sized enterprises (‘SMEs’) no longer fall within scope” (Weil, March 2026). They can still report voluntarily, and customers can still ask them for data, within the limits explained in the value chain section below.
Interpretation to be confirmed: non-EU issuers. The amended Article 5(2) of the CSRD applies the same two thresholds to “issuers as defined in point (d) of Article 2(1) of Directive 2004/109/EC” (Directive (EU) 2026/470, Art. 3(1)). Law-firm briefings read this as covering non-EU issuers listed on an EU regulated market from FY2027 (Weil). We have not reviewed the Transparency Directive provisions that govern third-country issuers, so treat this as an interpretation and confirm your CSRD scope with counsel.
First-Wave Reporters: Out of CSRD Scope Is Not Yet Off the Hook
The costliest misreading concerns the “first wave”: large public-interest entities that reported for financial year 2024 under the original directive. Those now below the thresholds are not released by the directive itself. Instead, the amended Article 5(2) of the CSRD lets Member States “exempt undertakings or issuers which do not exceed a net turnover of EUR 450 000 000 or an average number of 1 000 employees during the financial year”, on a consolidated basis where applicable, for financial years starting between 1 January 2025 and 31 December 2026 (Directive (EU) 2026/470, Art. 3(1)). The option is open to each Member State; it is not an obligation. Until it is written into national law, Deloitte notes, these entities “remain subject to existing requirements” (Deloitte).
Where Member States stand
| Member State | Original CSRD | Omnibus I | First-wave option FY2025–2026 | Tracker entry |
|---|---|---|---|---|
| France | Transposed by Ordinance 2023-1142 of 6 December 2023 | No development reported | Not reported | 10 Feb 2026 |
| Germany | In progress: bill not yet adopted by the Bundestag; the amended draft also incorporates the Omnibus I amendments | No separate development reported | Not reported | 17 Apr 2026 |
| Italy | Transposed by No. 125 of 30 August 2024, in force 25 September 2024 | No development reported | Not reported | 21 Aug 2025 |
| Luxembourg | In progress: draft bill no. 8370 of 29 March 2024 | No development reported | Not reported | 6 Nov 2025 |
Source: Linklaters, EU CSRD and Omnibus I transposition tracker. Some entries predate Omnibus I or the September 2026 delegated acts, which is itself a reason to check your Member State’s official gazette before relying on them.
⚠️ Do not stand down a programme on an exemption your country has not enacted. Data for a closed financial year cannot be collected after the fact. Until national law changes, a de-scoped first-wave company should treat its FY2025 report (due in 2026, and in most cases already published) and its FY2026 report (due in 2027) as required, and should get the national position in writing from counsel.
Non-EU Groups and Article 40a CSRD Scope
A group with no EU parent can still fall within CSRD scope. Under Article 40a of the Accounting Directive as amended, the test applies where the third-country group’s EU net turnover exceeds €450 million “for each of the last two consecutive financial years”, and the obligation then falls on an EU subsidiary or branch whose net turnover exceeded €200 million in the preceding financial year: the text covers subsidiaries “which, on their balance sheet dates, exceed” that figure, and branches whose net turnover exceeds it (Directive (EU) 2026/470, Art. 2(13)). The recitals record the change: the group threshold rises from €150 million to €450 million. It is that EU subsidiary or branch that must publish the report at the level of the non-EU group (Deloitte). Law firms place the first reporting year at financial years beginning in 2028, with reports in 2029 (Covington; Latham & Watkins).
Two consequences deserve attention. First, an EU subsidiary that exceeds both EU thresholds is in scope in its own right from FY2027, a year before the group report under Article 40a on the law-firm reading of when Article 40a CSRD scope begins. Second, the content of third-country reports is governed by separate standards adopted by delegated act, not by the ESRS for EU undertakings; non-EU groups should plan against that instrument.
The CSRD Scope Timeline: Every Date That Binds
Three timetables run side by side: the directive that defines CSRD scope, the national laws that apply it, and the standards that define content. Most scheduling errors come from confusing one with another.
Figure 4. Key CSRD scope dates, 2025–2028.
ESRS options for financial year 2026
The revised ESRS apply to financial years beginning on or after 1 January 2027. The choice for financial years beginning in 2026 is not open to everyone: it concerns only undertakings that are actually required to report for that year, in practice first-wave companies that their Member State has not exempted. Those undertakings may apply the existing ESRS, the existing ESRS with eight reliefs taken from the new regulation, or the revised ESRS, and they “shall clearly state in their sustainability statement which version they apply” (Delegated Regulation (EU) 2026/1563, Art. 2–3; Linklaters). What the revised standards require once you are in CSRD scope is covered in our ESRS guide.
What Leaving CSRD Scope Changes: Taxonomy and Assurance
EU Taxonomy reporting
Omnibus I does not amend the Taxonomy Regulation; its title lists only four directives. The link runs through a cross-reference instead. Article 8(1) of Regulation (EU) 2020/852 applies to “any undertaking which is subject to an obligation to publish non-financial information pursuant to Article 19a or Article 29a” of the Accounting Directive. When the thresholds in those articles rise, the Taxonomy obligation of EU undertakings and EU parents narrows with them. Weil reads it the same way: “Only in-scope companies are required to report under Article 8 of the Taxonomy Regulation” (Weil). In its original wording, Article 8(1) does not mention Article 40a; we have not checked whether a later amendment changed that, so non-EU groups whose CSRD scope arises under Article 40a should take advice rather than assume either answer.
For companies that remain in CSRD scope, the content of the Taxonomy disclosure has also changed. According to BCLP and EY, Delegated Regulation (EU) 2026/73, adopted on 4 July 2025, was published on 8 January 2026, entered into force on 28 January 2026 and applies to reports on financial year 2025, with an option to keep the previous rules for that year. The same briefings describe a materiality threshold that lets non-financial undertakings skip the detailed eligibility and alignment assessment for activities below 10% of turnover, CapEx or OpEx, and shorter reporting templates (BCLP; EY, January 2026). We have not reviewed the regulation’s own text, so check it before relying on these dates.
💡 Not mandatory does not mean not needed. Green loans, sustainability-linked bonds and investor questionnaires may still require Taxonomy data under contract. Read your financing agreements before you shut down a Taxonomy process. Our guide to EU Taxonomy software covers the tooling side of that decision.
Assurance
For undertakings in CSRD scope, assurance stays at the limited level: the amended Article 34 of the Accounting Directive refers to an opinion “based on a limited assurance engagement”, and the Commission must adopt harmonised standards “no later than 1 July 2027” (Directive (EU) 2026/470, Art. 1(3) and Art. 2). Our ESRS data points checklist is a practical starting point for that engagement.
Out of CSRD Scope but Still Asked: the Value Chain Cap
Leaving CSRD scope does not stop customers asking for data, but it limits what they can insist on.
Who is protected
The directive creates a category of “protected undertakings”: value chain companies that do “not exceed, on [their] balance sheet date, an average number of 1 000 employees during the preceding financial year” (Directive (EU) 2026/470, Art. 2(4)). In other words, the protection covers companies with up to 1,000 employees, not only those with fewer. A reporting undertaking “shall not require protected undertakings to provide information exceeding the information specified in the voluntary standards” adopted under Article 29ca, and a protected undertaking has the right to decline such a request.
What a customer may not do
For suppliers outside CSRD scope, the mechanism has more teeth than most summaries suggest. A contract term that demands more is not binding, although the rest of the contract stays valid. A customer that asks for more must tell the supplier which items go beyond the standard and that it may refuse them. A customer may rely on the supplier’s self-declaration of size, unless it knows or should know that the declaration is manifestly wrong. And a reporting undertaking that reports the necessary value chain information, without reporting any information from protected undertakings that exceeds the voluntary standards, is deemed to have complied with its obligation to report value chain information (Directive (EU) 2026/470, Art. 2(4)).
Figure 5. How the value chain cap works.
What the cap does not cover
The cap also has clear limits. It does not affect information requests made for purposes other than CSRD reporting, including requests to comply with EU due diligence rules, and it does not create any duty for a supplier to provide data. The recitals add that voluntary sharing, such as information commonly exchanged within a sector, remains possible.
The voluntary standard and Annex II
For suppliers outside CSRD scope, the reference point is Delegated Regulation (EU) 2026/1560, the voluntary standard. It entered into force on the third day after its publication in the Official Journal, but its Article 3, which sets the cap, applies only “from the financial years beginning on or after 1 January 2027” (Art. 4). Article 3(2) limits the cap to “the datapoints specified in Annex II”. Annex II, headed “List of disclosures covered by the value chain cap”, is a table with separate columns for undertakings with 10 employees or fewer and for those with more than 10. Its Basic Module entries include total energy consumption in MWh and estimated absolute gross greenhouse gas emissions (B3); Scope 1 and Scope 2 are not named separately. We have not independently verified which column each of these datapoints is marked under, so check the column for your headcount before declining a climate request. A supplier ESG questionnaire built around the cap avoids the dispute altogether.
How to Determine Your CSRD Scope: A Five-Step Procedure
- Identify the entity you are testing. An EU undertaking, an EU parent on a consolidated basis, or a non-EU group under Article 40a.
- Measure the two EU thresholds on the right basis. Average employees over the financial year, net turnover, and consolidated figures for a parent. Record which accounts you used.
- Test Article 40a separately for non-EU groups. Check EU net turnover for each of the last two years, then whether any EU subsidiary or branch exceeded €200 million of net turnover in the preceding year, then test each EU subsidiary against the EU thresholds on its own.
- Check your reporting history. If you reported for FY2024 and now fall below a threshold, get your Member State’s position on the FY2025–2026 option before changing anything.
- Document the conclusion. A one-page memo with the figures, sources, conclusion and date of the next review is enough. Repeat the test every year, since headcount and turnover move.
If you conclude that you are in CSRD scope, the next questions concern content and tooling. Double materiality decides which ESRS topics apply, our double materiality matrix template structures the assessment, and our ranking of ESG reporting software compares the platforms against our published methodology.
Common CSRD Scope Mistakes
In the assessment
- Applying the old two-of-three test
- Using year-end headcount instead of the annual average
- Testing a parent on its own accounts instead of consolidated figures
- Assuming a non-EU parent’s status settles that of its EU subsidiaries
In the decision
- Standing down a first-wave programme before national law grants the exemption
- Keeping a mandatory Taxonomy process that no longer applies, or dropping one a lender still requires
- Treating a supplier with exactly 1,000 employees as unprotected by the cap
- Planning a 2026 report without stating which ESRS version applies
Bottom line. After Omnibus I, CSRD scope is narrower and easier to test: two cumulative thresholds, no mandatory regime for listed SMEs, and a separate, later test for non-EU groups. The rules still apply through national law, and law-firm briefings put the transposition deadline at 19 March 2027. Test on current consolidated figures, check your Member State before standing anything down, and write down the answer.
Sources and Verification
| Claim | Source and status |
|---|---|
| Directive (EU) 2026/470 of 24 February 2026; OJ 26 February 2026 | EUR-Lex — PRIMARY, read (OJ header) |
| Entry into force 18 March 2026 | EUR-Lex record (metadata) — entry-into-force article not reviewed |
| First financial year 2027 for EU undertakings (Art. 5(2)(a) CSRD now ends with financial years starting in 2026) | Directive 2026/470, Art. 3(1) and recital 31 — PRIMARY, read |
| Cumulative thresholds: > 1,000 average employees and > €450m net turnover (Art. 19a(1), 29a(1)) | Directive 2026/470, Art. 2(4)–(5) — PRIMARY, read |
| Previous large-undertaking criteria (250; €50m; €25m) | Directive (EU) 2022/2464 and Delegated Directive (EU) 2023/2775 — PRIMARY |
| Listed SME regime (Art. 29c) deleted | Directive 2026/470, Art. 2(7) — PRIMARY, read; Weil |
| Article 40a thresholds: EU turnover > €450m for two consecutive years; subsidiary or branch net turnover > €200m in the preceding year | Directive 2026/470, Art. 2(13) — PRIMARY, read |
| Article 40a first financial year 2028 | Covington, Latham & Watkins, Deloitte — SECONDARY (law firms, concordant) |
| Member State option for FY2025–2026 (Art. 5(2) CSRD) | Directive 2026/470, Art. 3(1) — PRIMARY, read |
| Transposition 19 March 2027 (CSRD) and 26 July 2028 (CSDDD) | Weil, Latham & Watkins — SECONDARY (law firms); closing articles of the directive not reviewed |
| Limited assurance: standards by 1 July 2027; opinion based on a limited assurance engagement (Art. 34) | Directive 2026/470, Art. 1(3) and Art. 2 — PRIMARY, read |
| Value chain cap: protected undertakings ≤ 1,000 employees; no binding contract terms; duty to inform; self-declaration; deemed compliance; carve-outs | Directive 2026/470, Art. 2(4) — PRIMARY, read |
| Revised ESRS (EU) 2026/1563: OJ 21 Sep 2026; in force 10 Nov 2026; FY2027; three routes for FY2026 | EUR-Lex, Art. 2–3 — PRIMARY, read; Linklaters, Ashurst |
| Voluntary standard (EU) 2026/1560: adopted 3 Jul 2026; in force on the third day after OJ publication; cap (Art. 3) applies from FY beginning on or after 1 Jan 2027 (Art. 4); cap limited to the Annex II datapoints | Delegated Regulation (EU) 2026/1560, Art. 3–4 and Annex II — Primary source identified; relevant Annex II details not independently verified; Linklaters, Ashurst |
| Taxonomy Article 8(1) refers to Articles 19a and 29a; no amendment to Regulation 2020/852 | Regulation (EU) 2020/852, Art. 8(1) — PRIMARY, read (original OJ text); Directive 2026/470 (title); Weil |
| Delegated Regulation (EU) 2026/73: adopted 4 Jul 2025; OJ 8 Jan 2026; in force 28 Jan 2026; applies to FY2025; 10% materiality threshold | BCLP, EY — SECONDARY (law firm / audit firm); regulation text not reviewed |
| About 80% (Commission, Feb. 2025) and 90% (Ropes & Gray, Dec. 2025) of companies removed | ESG Dive 2025, ESG Dive Dec. 2025 — ESTIMATES, attributed |
| National transposition status (FR, DE, IT, LU) | Linklaters transposition tracker — SECONDARY (law firm); entries dated per country; check the current position |
What we could not establish
- The closing articles of Directive (EU) 2026/470 were not reviewed in this check. The transposition deadlines (19 March 2027 and 26 July 2028) and the FY2028 start of Article 40a come from concordant law-firm briefings; the 18 March 2026 entry into force comes from the EUR-Lex record.
- The text of Delegated Regulation (EU) 2026/73 was not reviewed; its dates and the 10% threshold are reported from BCLP and EY.
- In Annex II of Delegated Regulation (EU) 2026/1560, which size column each datapoint, including the climate datapoints, is marked under; read the table for your own headcount.
- Whether a later amendment brought group reports published under Article 40a within Taxonomy Article 8.
- A current, consolidated count of companies in CSRD scope; the 80% and 90% figures are estimates made before final adoption.
- The adoption date of the delegated act on third-country reporting standards, and the national position on the first-wave option in Member States not listed above.
This assessment would change if a Member State enacts or declines the first-wave option, if the Commission adopts the third-country standards or the limited assurance standards, or if a further omnibus amends the thresholds. We recheck the CSRD scope rules every month until the transposition deadline reported for March 2027.
This is a regulatory explainer, not legal advice. Confirm your CSRD scope position with counsel or your assurance provider before any filing decision. Corrections: contact@aigreentools.com.
Frequently Asked Questions About CSRD Scope
Who is in CSRD scope after Omnibus I?
EU undertakings, and EU parents on a consolidated basis, that exceed both 1,000 average employees and €450 million net turnover, starting with financial year 2027. Listed SMEs are no longer subject to mandatory reporting. Non-EU groups are caught under Article 40a if their EU net turnover exceeds €450 million in each of the last two years and they have an EU subsidiary or branch above €200 million; law firms report a start with financial year 2028.
What changed from the original CSRD scope test?
The original directive treated an undertaking as large if it exceeded two of three criteria: 250 employees, €50 million net turnover and €25 million balance-sheet total after the 2023 inflation adjustment. Omnibus I requires both more than 1,000 average employees and more than €450 million net turnover, and drops the balance-sheet criterion. Because both conditions must now be met, many companies that were large under the old test are now outside CSRD scope.
How many companies are still in CSRD scope?
There is no official consolidated count. When it tabled the proposal in February 2025, the European Commission estimated that about 80% of companies would leave the directive’s scope. After the December 2025 political agreement, Ropes & Gray estimated the figure at about 90%. Both are estimates made before final adoption.
We reported for FY2024 but now fall below the thresholds. Can we stop?
Not automatically. The directive allows Member States to exempt undertakings that do not exceed €450 million net turnover or 1,000 average employees for financial years starting in 2025 and 2026, but it does not oblige them to. Until your Member State writes that option into national law, existing requirements remain. Get the national position in writing before standing a programme down, because data for a closed financial year cannot be collected afterwards.
Does CSRD scope apply to non-EU companies?
Yes, in two ways. Under Article 40a, a non-EU group with more than €450 million of EU net turnover in each of the last two financial years and an EU subsidiary or branch with more than €200 million of net turnover must report through that subsidiary or branch, from financial year 2028 according to law-firm briefings. Separately, an EU subsidiary that exceeds both EU thresholds is in CSRD scope in its own right from financial year 2027.
When is the first report due under the new CSRD scope?
For EU undertakings in scope, the first financial year is the one beginning on or after 1 January 2027, reported in 2028. According to law-firm briefings, non-EU groups under Article 40a start with financial years beginning in 2028, reporting in 2029. Undertakings that must report for financial years beginning in 2026 may use the existing ESRS, the existing ESRS with the new reliefs, or the revised ESRS, and must state which version they applied.
If we leave CSRD scope, do we still report under the EU Taxonomy?
For an EU undertaking or EU parent, generally not. Article 8 of the Taxonomy Regulation applies to undertakings reporting under Articles 19a and 29a of the Accounting Directive, so an EU company that falls out of CSRD scope no longer has the mandatory Taxonomy disclosure. For non-EU groups reporting under Article 40a, we have not been able to confirm how Article 8 applies, so take advice. Lenders, bond frameworks and investors may still require Taxonomy data under contract, so check those commitments before closing the process.
What can customers still ask from us if we are out of CSRD scope?
If you have no more than 1,000 average employees, you are a protected undertaking. A customer reporting under the CSRD may not require more information than the voluntary standard specifies; the limit is the list of datapoints in Annex II of Delegated Regulation (EU) 2026/1560, which applies from financial years beginning on or after 1 January 2027 and distinguishes undertakings with 10 employees or fewer from larger ones. Contract terms demanding more are not binding, and you may decline the excess. The cap does not cover requests for other purposes, such as EU due diligence, or voluntary sharing.
