CSRD applies to a broad range of companies — far broader than its predecessor the NFRD. This decision tree helps you determine whether CSRD applies to your company, when your first report is due, and which wave you fall into.
The Four-Question Test
Work through these questions in order to determine your CSRD position.
Question 1: Are you a large company already subject to NFRD?
NFRD applies to Public Interest Entities (PIEs) with 500+ employees. PIEs include:
- Companies listed on EU regulated markets
- EU credit institutions (banks)
- EU insurance undertakings
If yes → Wave 1. Your first CSRD report covers financial year 2024, due in 2025. You are already subject to mandatory sustainability reporting and CSRD is the upgraded framework.
If no → Go to Question 2.
Question 2: Are you a large EU company meeting two of three size criteria?
The criteria are:
- 250 or more employees
- €40M or more net turnover
- €20M or more total assets (balance sheet)
You are "large" if you meet at least two of these three criteria.
If yes AND you are EU-based or listed in the EU → Wave 2. First CSRD report covers FY 2025, due in 2026.
If no → Go to Question 3.
Question 3: Are you listed on an EU regulated market (as an SME)?
Even smaller companies — SMEs — are subject to CSRD if they are listed on EU regulated markets. Listed SMEs are defined as companies with fewer than 250 employees and under the Wave 2 size thresholds, but whose shares or bonds are admitted to trading on an EU regulated market.
If yes → Wave 3. First CSRD report covers FY 2026, due in 2027. Note: listed SMEs can apply a simplified reporting standard (ESRS VSME, if adopted) for the first few years.
If no → Go to Question 4.
Question 4: Are you a non-EU company with significant EU revenue?
Non-EU companies — US companies, UK companies, Swiss companies — that generate more than €150M net turnover in the EU AND have at least one of:
- A large EU subsidiary, or
- An EU branch generating over €40M in net turnover
...are subject to CSRD.
If yes → Wave 4. First CSRD report covers FY 2028, due in 2029. The reporting covers EU-level consolidated sustainability information.
If no → CSRD does not directly apply to you as a reporting entity. However, read on for indirect scope.
Indirect Scope: When CSRD Affects You Even If You're Out of Scope
Even if CSRD does not directly apply to your company as a reporting entity, you may be affected:
Value Chain Reporting
CSRD-reporting companies must include sustainability information about their value chain — their suppliers and customers. Large companies subject to CSRD will ask their significant suppliers for sustainability data, even if those suppliers are too small to be directly in CSRD scope.
If you supply products or services to large EU companies, expect to receive sustainability questionnaires that flow from CSRD value chain reporting requirements. These are not optional — your customers need the data for their own reports.
SFDR and Investment Due Diligence
Companies seeking EU institutional investment — from impact funds, ESG-focused investors, or pension funds subject to SFDR — will face investor sustainability due diligence that mirrors CSRD requirements, even if the company is not directly in scope.
Enterprise Customer Requirements
Large enterprise customers who are CSRD-reporting entities will include supply chain sustainability requirements in procurement processes. Scope 3 emissions data from suppliers is explicitly required under ESRS E1 for value chain emissions. Your major customers may require your carbon footprint data as part of their own compliance.
Applicability Summary Table
| Company type | Applies from | Report due |
|---|---|---|
| Large PIE, already in NFRD scope | FY 2024 | 2025 |
| Large EU company (2 of 3: 250+ employees, €40M+ turnover, €20M+ assets) | FY 2025 | 2026 |
| EU-listed SME | FY 2026 | 2027 |
| Non-EU company: €150M+ EU turnover + large EU subsidiary/branch | FY 2028 | 2029 |
| Other (below thresholds, unlisted, no large EU presence) | Not directly in scope — but value chain requirements apply |
CSRD in Member State Implementation
CSRD is an EU directive — member states are transposing it into national law. Implementation pace varies:
- Most major EU member states (Germany, France, Netherlands, Ireland) have transposed CSRD or are in the final stages
- Some delayed transpositions mean national enforcement may start slightly later than the EU deadlines
- Non-transposition does not exempt in-scope companies from the obligation — the directive has direct effect where not transposed on time