Which companies need to report on sustainability?

Which companies are covered by the CSRD?

The CSRD, or Corporate Sustainability Reporting Directive, is the EU's directive for sustainability reporting. This article focuses on the question of scope: which companies are covered by the CSRD today, which thresholds apply, and what has changed through the EU's Omnibus proposal. The rules affect more companies than you might think. They don't just apply to the companies that report themselves. They also reach their suppliers and customers.

Want to understand what the CSRD is in general? Read more on our CSRD page.

The CSRD (Corporate Sustainability Reporting Directive) in brief

In short: the CSRD doesn't apply to every company. Whether a company is covered depends on its size, number of employees, turnover and whether it's listed on a regulated market.

The purpose of the CSRD is to make companies' environmental impact and sustainability information transparent and comparable, just as financial information already is. Among other things, the reporting is meant to steer capital towards more sustainable investments and reduce greenwashing by raising the bar for openness. Companies in scope must also carry out a double materiality assessment. We explain more about that further down.

What is Omnibus? The background to the new requirements

In 2025, the European Commission presented a simplification package known as Omnibus. The background was criticism that the CSRD requirements had become too complicated and costly, especially for companies close to the original thresholds. Now fewer companies are covered, there are fewer data points in the ESRS, and a single common threshold replaces the old wave system (1) (2) (3). The process moved unusually fast compared with earlier EU directives, which is one reason why several details are still being implemented in the member states.

Timeline: from proposal to adopted law

The process moved unusually fast for an EU directive. Here are the key steps in chronological order.

The CSRD came into force in Sweden on 1 July 2024

Sweden introduced the CSRD into law on 1 July 2024. The first companies (Wave 1) reported as early as 2025 (6). The requirements apply to financial years starting on or after that date. For companies with a calendar-year financial year, that meant the 2024/2025 financial year in practice.

The delay in December 2025

Through the so-called "stop-the-clock" decision, Wave 2 and Wave 3 companies were given a two-year postponement. The decision has been part of Swedish law since 31 December 2025, without changing the thresholds themselves (10). The aim was to give companies and member states more time while the bigger changes in Omnibus were being negotiated.

The Council's decision in February 2026 and entry into force in March 2026

The EU's Council of Ministers approved Omnibus I on 24 February 2026, and the directive entered into force on 18 March 2026 (1) (4). This decision is behind the new, higher thresholds, but according to FAR they haven't yet been fully implemented in Swedish law (5). Until the Swedish implementation is complete, the older thresholds therefore still apply to companies that aren't already covered as Wave 1.

Companies covered by the CSRD under the original thresholds

Before Omnibus, the EU's general threshold for "large companies" under the Accounting Directive applied. A company was covered by the CSRD if it met at least two of three criteria: more than 250 employees, a balance sheet total above EUR 25 million, or net turnover above EUR 50 million (9). Before an EU adjustment in 2023, the limits were even lower: EUR 20 million in balance sheet total and EUR 40 million in turnover. That meant more companies were covered even before Omnibus entered the picture.

The new thresholds: new requirements through Omnibus

Omnibus raises the bar further, but in a different way. Instead of "at least two of three", both of the conditions below must now be met at the same time (2) (3) (4).

Employees: from 250 to 1,000

The employee threshold goes up from more than 250 to more than 1,000 employees on average during the financial year (3) (4).

Net turnover: EUR 450 million

The turnover requirement goes up to net turnover above EUR 450 million. For groups outside the EU, a similar requirement applies to their EU turnover, with an additional requirement for subsidiaries or branches within the Union (4).

Balance sheet total is no longer a separate criterion

Unlike the original thresholds, balance sheet total is no longer a criterion in its own right (3) (4). That makes the assessment simpler for companies near the limit, since they only need to keep track of two measures instead of three.

Comparing the old and new thresholds

The difference isn't just much higher numbers. The way you work out whether a company is covered also changes, from "at least two of three" to both requirements having to be met (2) (3).

The wave system: how it worked and what happens now

The CSRD was originally rolled out in three steps, known as waves. Wave 1 is large listed companies, banks and insurers with more than 500 employees. They've been reporting since 2024, and Omnibus changes nothing for them (6). Wave 2 is other large companies, which were due to report from 2027, but with the new, higher thresholds most of them are no longer covered (2) (10). Wave 3 is listed small and medium-sized companies, which were set to get simpler rules from 2028. That track has now effectively been scrapped, since almost no such companies reach the new thresholds (3).

Which companies are covered by the CSRD today?

To sum up, the companies covered today are those already reporting since 2024 (Wave 1), plus other large companies that meet the new, common thresholds from financial year 2027 (2) (4) (6).

Companies not covered by the CSRD

Under the new definition, companies not covered by the CSRD are in practice all those that don't reach the combined thresholds, regardless of whether they were previously counted as Wave 2 or Wave 3.

Double materiality assessment: what's required of companies covered by the CSRD

Companies in scope must carry out a double materiality assessment. This means assessing both how the business affects the world around it and how sustainability issues could affect the company financially.

Reporting under the CSRD and the ESRS

Reporting must follow the ESRS (European Sustainability Reporting Standards). If you want to dig deeper into the standards, read more on our page about the ESRS and sustainability reporting.

How sustainability reporting and financial reporting fit together

The sustainability report isn't the same as the financial reporting you already do in your annual report. But for companies in scope, the two must be integrated into the same document, rather than attaching the sustainability report as a separate appendix.

How small and medium-sized companies outside the scope are affected

Even without a legal requirement, many smaller companies will need to report sustainability data to customers or banks that ask for it, especially if they're part of the supply chain of a company that is itself covered by the CSRD.

The Voluntary EU standard: read more about the exemptions

The Voluntary EU standard VS (formerly known as VSME) is voluntary, but it gives small and medium-sized companies a standardised way to respond to requests without having to apply the full ESRS (8). Omnibus also protects companies with fewer than 1,000 employees from being forced to provide more data than the VS standard requires (4).

Want to get started before your customers begin asking? Try GoClimate's automated sustainability platform and get a sustainability report under the VS standard, based entirely on your bookkeeping, without having to get to grips with the full ESRS.

Groups and subsidiaries: who reports for whom?

If a parent company meets the criteria, it reports for the whole group as one entity, and the subsidiaries don't need to submit separate reports (9). If only a subsidiary is covered while the parent isn't, the subsidiary becomes responsible for reporting on its own (9).

How big is the change in practice?

Analyses have estimated that 80–90% fewer companies are covered, compared with the original thresholds (7). For Sweden, there have been estimates of a drop from around 4,000 to fewer than 400 companies. However, that's an estimate based on levels discussed earlier, not an official figure now that the final thresholds have been agreed (7).

Frequently asked questions about which companies are covered by the CSRD

What criteria decide whether a company is covered by the CSRD today?

Either the company has been required to report since 2024, or it must meet both of the new requirements: more than 1,000 employees and more than EUR 450 million in turnover (2) (3).

Is it true that the limit has been raised from 250 to 1,000 employees?

Yes. At the same time, the turnover requirement was raised to EUR 450 million, and balance sheet total was removed as a separate criterion (3) (4).

Which financial year do the new requirements apply from?

From financial years starting on or after 1 January 2027, as the requirements are introduced into Swedish law (2) (5).

Is this decided, or could it change again?

The new thresholds have been decided and adopted at EU level (1) (4). Swedish transposition is under way but isn't complete at the time of writing (5).

Summary: companies covered by the CSRD under the new and old thresholds

The old wave system is in practice replaced by a single, much higher threshold: more than 1,000 employees and more than EUR 450 million in turnover. Companies that fall outside the legal requirement should still expect higher expectations from customers and financiers, and the VS standard (formerly VSME) offers a structured way to meet them.

Explore GoClimate's automated sustainability platform, which produces a sustainability report under the VS standard, based entirely on your bookkeeping.