In the European Union, when a law is adopted that later needs to be specified or updated, the legislator can delegate powers to the Commission to draw up delegated acts. This mechanism allows legislation to be adjusted without launching a full new legislative process, speeding up its adaptation to reality. In corporate sustainability, delegated acts have been the route used to adopt the ESRS, the technical standards of the CSRD.
What is the CSRD and why does it matter to companies?
The CSRD (Corporate Sustainability Reporting Directive) sets a common framework for companies to publish sustainability information. Its aim is to improve the transparency and comparability of non-financial information and to drive the transition to a more sustainable economy.
Compared with its predecessor, Directive 2014/95/EU (NFRD), now repealed, the CSRD introduces significant changes:
- It raises the status of the sustainability report: non-financial information is now called the sustainability statement and is placed on a par with the financial report.
- It widens the scope: in its original design the directive was set to affect around 50,000 companies in the EU. However, the Omnibus I package, finalised as Directive (EU) 2026/470, raised the thresholds and substantially reduced that universe (see below).
- Double materiality: it is based on the principle of double materiality, which requires reporting both on how sustainability affects the company and on the company's impact on people and the environment.
Who does the CSRD apply to as of 2026?
The original timetable provided for a staggered entry (large public-interest entities with more than 500 employees from 2024, the rest of large companies from 2025 and listed SMEs from 2026). That timetable no longer exists. Directive (EU) 2026/470, published in the Official Journal on 26 February 2026 and in force since 18 March 2026, replaces it with a single threshold: more than 1,000 employees and more than 450 million euros in net turnover, both criteria at once. The first reports cover financial years starting on or after 1 January 2027 (published in 2028), and member states have until March 2027 to transpose the directive. As a result, virtually all SMEs fall outside mandatory reporting. We explain this in our analysis of the Omnibus package.
What are the CSRD delegated acts?
The central delegated act is Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 (published in the Official Journal on 22 December 2023), which adopted the first set of European Sustainability Reporting Standards (ESRS), mandatory for companies subject to the CSRD.
The first set of ESRS is structured as follows:
Cross-cutting standards
- ESRS 1: general requirements for preparing sustainability information.
- ESRS 2: general disclosures about the company and its strategy.
Environmental standards (E)
- ESRS E1: climate change.
- ESRS E2: pollution.
- ESRS E3: water and marine resources.
- ESRS E4: biodiversity and ecosystems.
- ESRS E5: resource use and circular economy.
Social standards (S)
- ESRS S1: own workforce.
- ESRS S2: workers in the value chain.
- ESRS S3: affected communities.
- ESRS S4: consumers and end-users.
Governance standard (G)
- ESRS G1: business conduct (ethics, anti-corruption and anti-bribery, and so on).
The July 2026 revision of the ESRS
Delegated acts are not static: that is precisely their purpose. Following the Omnibus simplification mandate, the European Commission adopted the delegated act containing the revised ESRS on 3 July 2026, amending Delegated Regulation (EU) 2023/2772. The revision cuts more than 60% of the mandatory datapoints and more than 70% of all datapoints, removes voluntary disclosures and relaxes the materiality assessment with a top-down approach. It applies to financial years starting on or after 1 January 2027, with early adoption possible for 2026 financial years. In other words, the original ESRS and the revised ones are not the same, and it is worth planning your reporting around the revised version.
Prepare and verify your sustainability reports with Manglai
At Manglai, specialists in calculating emissions under the GHG Protocol and ISO 14064, we offer solutions to comply with the CSRD and the ESRS:
- Measuring the carbon footprint accurately, including Scopes 1, 2 and 3.
- Identifying reduction measures from data analysis.
- Producing auditable sustainability reports compliant with the standards.
- Communicating the sustainability strategy to stakeholders.
If your company falls within the scope of the CSRD, discover how Manglai handles CSRD compliance from start to finish.
Frequently asked questions
What does CSRD stand for?
CSRD stands for Corporate Sustainability Reporting Directive. The form "CSDR" that appears in some URLs is a typo.
What is the main delegated act of the CSRD?
Delegated Regulation (EU) 2023/2772 of 31 July 2023, which adopted the first set of ESRS. On 3 July 2026 the Commission adopted the delegated act revising it, cutting more than 60% of the mandatory datapoints.
Who does the CSRD require to report as of 2026?
After Directive (EU) 2026/470, companies with more than 1,000 employees and more than 450 million euros in net turnover. The first reports cover financial years starting on or after 1 January 2027.
