Sustainability reporting rules changed sharply in 2025 and 2026. The EU first postponed CSRD reporting for later waves by two years, then the February 2026 Omnibus directive narrowed scope to undertakings with more than EUR 450 million turnover and 1,000 employees and raised the thresholds for non-EU groups. The UK published its own ISSB-based standards, UK SRS, in February 2026 for voluntary use while mandatory use is still being consulted on.
The EU: postponement, then a narrower CSRD
The stop-the-clock directive of April 2025 moved the second wave of CSRD reporters to financial years beginning on or after 1 January 2027 and listed SMEs to 1 January 2028. Directive (EU) 2026/470 of 24 February 2026 then limited sustainability reporting to undertakings that exceed both EUR 450 million net turnover and 1,000 average employees.
For first-wave reporters a Commission delegated act of July 2025 froze the information required for 2025 and 2026 at the 2024 level, and Member States may exempt first-wave companies that fall below the new thresholds for 2025 and 2026. Whether a given company reports therefore depends on national transposition as well as the EU text.12345
Non-EU groups with EU operations
Non-EU groups are caught through Article 40a of the Accounting Directive. The 2026 amendments raised the EU turnover test for third-country parents from EUR 150 million to EUR 450 million for each of the last two years, and set a EUR 200 million threshold for their EU subsidiaries and branches. Fewer non-EU groups are now in scope, but the first year of application should be confirmed.6
ISSB-based standards: UK SRS
The ISSB published IFRS S1 and S2 on 26 June 2023. The UK endorsed them with minor amendments as UK SRS S1 and S2, published in final form in February 2026 and available for voluntary use. The FCA consulted until 20 March 2026 on referring to UK SRS in the Listing Rules, and the government has said it will consult on requiring economically significant companies to use them.789
| Regime | Who | Status or date | Source |
|---|---|---|---|
| EU CSRD (as amended 2026) | Above EUR 450 million turnover and 1,000 employees | Second set from financial years starting on or after 1 January 2027 | Directive (EU) 2026/470 |
| EU Article 40a (non-EU groups) | EU turnover above EUR 450 million; EU subsidiary or branch above EUR 200 million | First year not confirmed | Directive (EU) 2026/470 |
| EU listed SMEs (stop-the-clock) | Third wave | Postponed to financial years from 1 January 2028; scope since narrowed | Directive (EU) 2025/794 |
| UK SRS S1 and S2 | Any entity | Final February 2026; voluntary | GOV.UK |
| ISSB IFRS S1 and S2 | Global baseline | Published 26 June 2023 | GOV.UK |
Decisions to make
- Does any EU entity, or the group's EU business, exceed the new EUR 450 million and 1,000-employee thresholds?36Below these thresholds the amended CSRD no longer requires sustainability reporting.
- Has the relevant Member State used the option to exempt first-wave companies for 2025 and 2026?5First-wave companies below the new thresholds may or may not have to report for those years depending on national law.
- Will the group adopt ISSB or UK SRS voluntarily ahead of any mandate?89UK SRS is voluntary today, and the FCA and government are consulting on mandatory use.
- Which reporting data will investors and customers ask for regardless of law?7The legal scope has narrowed, but ISSB-based disclosure remains the common baseline.
Documents usually needed
- Scoping memo applying the amended CSRD thresholds entity by entity and for the group
- National transposition check for each EU Member State where the group operates
- Double materiality or climate risk assessment where reporting continues
- Data inventory for climate and other sustainability metrics
- Board paper on voluntary ISSB or UK SRS adoption
Common mistakes
- Continuing to prepare for CSRD reporting on the pre-2026 thresholds
- Ignoring national transposition, which decides how the EU options are used
- Assuming a non-EU parent is outside CSRD without testing EU turnover for two consecutive years
- Treating UK SRS as mandatory for all companies in 2026
- Dropping data collection entirely when customers and lenders still expect disclosures
Questions businesses ask
Is a company with 600 employees still in CSRD scope?
Under the 2026 amendments the reporting requirements apply to undertakings exceeding both EUR 450 million net turnover and 1,000 average employees, so it would generally fall outside, subject to national transposition.3
Are UK SRS mandatory?
Not as of October 2026. The standards are available for voluntary use, and the FCA and the government are consulting on requirements.89
When does a US group with EU subsidiaries have to report?
Only where EU turnover exceeds EUR 450 million for each of the last two years and an EU subsidiary or branch exceeds EUR 200 million; the first year of application needs to be confirmed.6
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- The transposition deadline of Directive (EU) 2026/470, the first application year for Article 40a and the fate of listed SMEs could not yet be checked (the text was truncated).
- Adoption of simplified ESRS after the EFRAG consultation was not confirmed.
- ISSB adoption by jurisdiction (IFRS Foundation profiles) could not yet be checked.
- Singapore's climate reporting timetable for listed and large non-listed companies (ACRA sustainability reporting page) could not yet be checked.
- India's BRSR, Saudi and UAE sustainability disclosure rules, and US federal and California climate disclosure status were not researched.
- National transposition of the CSRD and the 2026 amendments in Germany and France was not checked.
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
The EU stop-the-clock directive postponed CSRD reporting by two years: large undertakings not yet reporting now start with financial years beginning on or after 1 January 2027, and listed SMEs with financial years beginning on or after 1 January 2028. Second and third waves under Directive (EU) 2022/2464; adopted 14 April 2025, published 16 April 2025, transposition by 31 December 2025. The scope of these waves was then narrowed by Directive (EU) 2026/470.
Directive (EU) 2026/470 of 24 February 2026, published on 26 February 2026, amends the CSRD, the Accounting Directive, the Audit Directive and the CSDDD to simplify sustainability reporting and due diligence requirements. EU Omnibus simplification; the political agreement was reached on 9 December 2025. Its transposition deadline could not yet be checked.
After the 2026 Omnibus amendments (Directive (EU) 2026/470), individual sustainability reporting under Article 19a applies to undertakings that exceed both a net turnover of EUR 450 million and an average of 1,000 employees during the financial year; parent undertakings of groups exceeding the same thresholds on a consolidated basis report at group level (Article 29a), and third-country undertakings with EU net turnover above EUR 450 million remain subject to Article 40a. Directive 2013/34/EU as amended by Directive (EU) 2026/470; the second set of undertakings applies from financial years starting on or after 1 January 2027. Check national transposition.
Corrected on independent check (19 October 2026): the earlier wording went beyond what the source states.
A Commission "quick-fix" delegated act adopted on 11 July 2025 means first-wave companies do not have to report additional information for financial years 2025 and 2026 compared with 2024. First-wave CSRD reporters. EFRAG consulted on simplified ESRS until 29 September 2025; adoption of revised ESRS was not confirmed.
The Commission page had no entries after December 2025 when read.
Member States may exempt first-wave undertakings that fall below the new EUR 450 million and 1,000-employee thresholds from sustainability reporting for financial years beginning between 1 January 2025 and 31 December 2026. Member State option under Directive (EU) 2026/470; the first set of undertakings is limited to three financial years from 1 January 2024.
For non-EU groups, the 2026 amendments raise the EU net turnover threshold for third-country parent undertakings from EUR 150 million to EUR 450 million, and set a EUR 200 million threshold for their EU subsidiaries and branches. Article 40a of Directive 2013/34/EU as amended; the EUR 450 million test applies for each of the last two consecutive financial years. The first financial year of application was not confirmed in the text read.
UK SRS S1 and S2 are the UK versions of IFRS S1 and IFRS S2, which the International Sustainability Standards Board published on 26 June 2023. Endorsed for UK use with minor amendments recommended by the Technical Advisory Committee in December 2024.
The UK government published final UK Sustainability Reporting Standards (UK SRS S1 and S2) in February 2026, and they are available for voluntary use by any entity. Whether and when use becomes mandatory has not been decided.
The FCA consulted until 20 March 2026 on amending the UK Listing Rules to refer to UK SRS, and the government has said it will consult on requiring economically significant companies to report using UK SRS. Listed companies (FCA) and other large companies (government). Outcomes after March 2026 were not confirmed.
Questions on this topic
9 statements on sustainability reporting: csrd, issb and uk srs
