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The CSRD and the ESRS are almost always mentioned together, but they are not the same thing. In a sentence: the CSRD is the law that requires sustainability reporting, and the ESRS are the technical standards that say exactly what to report and how. The CSRD sets the obligation; the ESRS provide the format. In this article we look at their differences, their similarities and how they stand after the 2025-2026 Omnibus package.
What is the CSRD?
The Corporate Sustainability Reporting Directive (CSRD) is the European rule that sets the framework for sustainability reporting by companies. It replaced and repealed the old Non-Financial Reporting Directive (NFRD). Its aim is to improve the transparency and comparability of ESG information, giving investors and stakeholders a fuller view of how companies perform.
Its central element is double materiality, which requires companies to analyse two perspectives:
- Impact materiality (inside-out): how the company's operations affect the environment and society.
- Financial materiality (outside-in): how sustainability factors, such as climate change or resource scarcity, affect the company's performance and viability.
The CSRD also requires the sustainability report to be verified by an independent third party with limited assurance, the level Directive (EU) 2026/470 has fixed as definitive, which adds reliability to the information.
What are the ESRS?
The European Sustainability Reporting Standards (ESRS) are the set of standards that define what information a report under the CSRD must contain. The first package, adopted as Delegated Regulation (EU) 2023/2772, includes 12 standards organised into four blocks:
- Cross-cutting: ESRS 1 (general requirements) and ESRS 2 (general disclosures).
- Environmental (E): from ESRS E1 (climate change) to ESRS E5 (resource use and circular economy).
- Social (S): from ESRS S1 (own workforce) to ESRS S4 (consumers and end-users).
- Governance (G): ESRS G1 (business conduct).
On 3 July 2026 the Commission adopted the delegated act with the revised ESRS, which keep those twelve standards and cut more than 60% of mandatory datapoints. They apply to financial years starting on or after 1 January 2027, with early application possible for the 2026 financial year.
By applying the ESRS, companies produce more complete and comparable reports. They are also connected to the EU Taxonomy, which helps channel investment towards sustainable activities.
CSRD versus ESRS: comparison table
| Aspect | CSRD | ESRS |
|---|---|---|
| What it is | A directive (European law) | A set of technical standards |
| Function | Sets the obligation to report and who it applies to | Defines what is reported and how |
| Legal form | Directive (EU) 2022/2464, amended by Directive (EU) 2026/470 and transposed by each Member State | Delegated Regulation (EU) 2023/2772, revised by the delegated act of 3 July 2026 |
| Nature | The "what is required" | The "how it is done" |
| Guiding principle | Double materiality | Operationalises double materiality into concrete datapoints |
In short: you cannot comply with the CSRD without the ESRS, and the ESRS would not be mandatory without the CSRD that underpins them.
Which companies are affected after the Omnibus?
This is the point that has changed the most. The original CSRD was going to reach around 50,000 companies. The Omnibus package cut that scope drastically. As of 2026, with Directive (EU) 2026/470 already in force (since 18 March 2026):
- The direct obligation is limited to large companies with more than 1,000 employees and more than 450 million euros in annual net turnover, both criteria at once.
- These companies will report on financial years starting on or after 1 January 2027 (first reports in 2028).
- The planned mandatory extension to listed SMEs was removed; they move to a voluntary framework (the VSME standard).
Companies with subsidiaries or activity in the EU may still be affected, and the cascade effect on suppliers remains. We develop this in our article on the CSRD for SMEs and the supply chain.
What information must be reported
The CSRD requires reporting on sustainability-related risks, opportunities and impacts, on the basis of double materiality and with external verification. The ESRS spell out those requirements standard by standard. This is the full set:
Cross-cutting standards:
- ESRS 1: general requirements. Principles for preparing the report.
- ESRS 2: general disclosures. Common information on strategy, governance and risk management.
Environmental standards:
- ESRS E1: climate change. GHG emissions and climate risk management.
- ESRS E2: pollution. Air, water and soil pollution.
- ESRS E3: water and marine resources. Water consumption and impact on marine ecosystems.
- ESRS E4: biodiversity and ecosystems. Protection of biodiversity.
- ESRS E5: resource use and circular economy. Resource management and circularity.
Social standards:
- ESRS S1: own workforce. Working conditions within the company itself.
- ESRS S2: workers in the value chain. Labour rights and conditions in the supply chain.
- ESRS S3: affected communities. Impact on local communities.
- ESRS S4: consumers and end-users. Product safety and consumer protection.
Governance standard:
- ESRS G1: business conduct. Business ethics and anti-corruption.
It is worth bearing in mind that this set has already been revised: following EFRAG's technical work, the Commission adopted the delegated act with the simplified ESRS on 3 July 2026, notably reducing the number of mandatory datapoints and easing the materiality assessment. We explain it in our article on the changes to the ESRS and the Quick Fix.
Frequently asked questions about the CSRD and ESRS
What is the main difference between the CSRD and the ESRS?
The CSRD is the directive that requires reporting and defines who it applies to; the ESRS are the technical standards that detail what information to include and how. The CSRD is the legal framework, the ESRS are the instruction manual.
Are the ESRS mandatory?
Yes, for companies subject to the CSRD. Their mandatory status derives precisely from the CSRD; on their own they would not bind anyone.
Does anything change with the Omnibus?
Yes. The Omnibus raised the thresholds (more than 1,000 employees and more than 450 million in turnover, both at once), pushed back the deadlines and is behind the simplification of the ESRS adopted on 3 July 2026. Double materiality, on the other hand, remains the backbone of the system.
How do they relate to the EU Taxonomy?
The ESRS include data aligned with the EU Taxonomy, so that the information reported helps identify which activities are environmentally sustainable for investment purposes.
If your company needs to prepare its report under the CSRD and the ESRS, at Manglai we help you structure the data and comply with the CSRD in a traceable and auditable way.
