CSRD Phase-In Timeline: Who Reports When

ze, listing status, and revenue.

• Double Materiality: All entities in scope must report according to the European Sustainability Reporting Standards (ESRS), requiring a double materiality assessment of both impact and financial risk.
• Assurance Requirement: Unlike previous frameworks, CSRD mandates limited assurance from the first year of reporting, with a planned transition to reasonable assurance.
• Global Reach: Non-EU parent companies with significant EU turnover (over €150 million) fall under Wave 4, marking a significant expansion of extraterritorial regulatory reach.

Why It Matters

The CSRD replaces the Non-Financial Reporting Directive (NFRD), expanding the number of companies required to provide sustainability disclosures from approximately 11,000 to nearly 50,000. For CFOs and compliance officers, the timeline is not merely a filing deadline but a countdown for data infrastructure development. Failure to align with the specific phase-in dates risks regulatory penalties, reputational damage, and restricted access to capital markets as investors increasingly rely on ESRS-aligned data for Article 8 and 9 fund classifications under the SFDR.

The Standard / Framework in Detail

The CSRD framework is built upon the European Sustainability Reporting Standards (ESRS), developed by EFRAG. The reporting obligations are determined by the entity's classification under the Accounting Directive.

Scope Criteria

An entity is generally considered a "large undertaking" if it exceeds at least two of the following three criteria:

1. Balance sheet total: > €25 million
2. Net turnover: > €50 million
3. Average number of employees: > 250

Note: These thresholds were recently adjusted upward by the European Commission to account for inflation.

Reporting Dimensions

Reporting must be integrated into the Management Report, not a standalone sustainability report. It must be provided in a digital, machine-readable format (XHTML) using the XBRL taxonomy to facilitate data aggregation by the European Single Access Point (ESAP).

Implementation Roadmap

Wave 1: NFRD Entities (FY 2024, Reporting 2025)

Entities already subject to the NFRD—primarily large public-interest entities with more than 500 employees—must begin collecting data on January 1, 2024. This group includes listed companies, banks, and insurance providers.

Wave 2: Other Large Undertakings (FY 2025, Reporting 2026)

All other "large" EU undertakings that were not previously subject to the NFRD. This includes large private companies that meet the size criteria mentioned above. This wave represents the largest volume of newly regulated entities.

Wave 3: Listed SMEs (FY 2026, Reporting 2027)

Listed Small and Medium-sized Enterprises (SMEs), small and non-complex credit institutions, and captive insurance undertakings. Listed SMEs have an "opt-out" possibility until 2028, provided they explain why the sustainability reporting was not provided.

Wave 4: Non-EU Parent Companies (FY 2028, Reporting 2029)

Non-EU companies with a net turnover in the EU exceeding €150 million for two consecutive years, and which have at least one large subsidiary or a branch in the EU with a turnover exceeding €40 million. This requires reporting at the consolidated global level of the non-EU parent.