How to Write a CSRD-Compliant Report

Status, September 2026: The EU's Omnibus I directive (in force March 18, 2026) narrows the CSRD to companies with more than 1,000 employees and more than €450 million in net turnover. The amendments apply from financial year 2027, with first reports in 2028, and member states must transpose them by March 2027. Source: Council of the EU.

Understanding CSRD

The Corporate Sustainability Reporting Directive (CSRD) is the EU's landmark sustainability disclosure regulation, replacing the Non-Financial Reporting Directive (NFRD). As adopted in 2022, it would have covered nearly 50,000 companies (up from about 11,700 under the NFRD); the 2026 Omnibus I directive cut that by around 90%. It introduces the European Sustainability Reporting Standards (ESRS), developed by EFRAG.

CSRD fundamentally changes sustainability reporting in Europe. Reports must be included in the management report (not a separate document), digitally tagged once the EU adopts its tagging rules, and subject to mandatory external assurance. The standards are detailed and prescriptive — this is not principles-based guidance but a comprehensive reporting framework.

Step 1: Determine Your Scope and Timeline

First, confirm whether and when CSRD applies to your entity:

• Companies with more than 1,000 employees and more than €450 million in net turnover (the scope after the 2026 Omnibus I directive): first-wave reporters (reporting since FY2024) continue; companies newly in scope report for FY2027, in 2028
• First-wave reporters below the new thresholds: drop out from FY2027 (member states may exempt them for FY2025 and FY2026)
• Listed SMEs: no longer in scope
• Non-EU groups with more than €450 million in EU net turnover and an EU subsidiary or branch with more than €200 million: FY2028, reports due 2029

Identify all entities within your consolidation scope. CSRD reporting covers the full consolidated group.

Step 2: Conduct Double Materiality Assessment

This is the foundational step — it determines which ESRS standards and datapoints you must report. CSRD explicitly requires double materiality:

Impact materiality (inside-out): Your actual or potential positive/negative impacts on people and environment across the value chain.

Financial materiality (outside-in): Sustainability topics that create or could create material financial effects on the company.

A topic is material if it meets either threshold. See our detailed materiality assessment guide.

ESRS requires you to assess materiality for all topical standards:

• E1 Climate change, E2 Pollution, E3 Water & marine resources, E4 Biodiversity, E5 Circular economy
• S1 Own workforce, S2 Workers in value chain, S3 Affected communities, S4 Consumers
• G1 Business conduct

Note: ESRS 2 (General Disclosures) is mandatory regardless of materiality. E1 (Climate) has special rules — if you determine climate is not material, you must provide detailed justification.

Step 3: Map Required Datapoints

For each material ESRS topic, identify the specific disclosure requirements:

The Commission adopted revised, simplified ESRS in July 2026 that cut mandatory datapoints by more than 60%; they apply from FY2027, and companies may use them for FY2026. Map against the version that applies to your reporting year.

Each ESRS standard contains:

• Governance disclosures: How the topic is governed
• Strategy disclosures: How it connects to business strategy
• Impact, risk, and opportunity management: Policies, actions, targets
• Metrics: Quantitative performance data

Conduct a detailed gap analysis:

1. List all required datapoints for your material topics
2. Assess current data availability for each (available/partially available/not available)
3. Identify system, process, and data gaps
4. Prioritize gap closure based on reporting timeline

This gap analysis becomes your implementation roadmap.

Step 4: Build Data Collection Systems

CSRD's detailed requirements demand robust data infrastructure:

• Value chain data: ESRS requires significant value chain information. Engage with suppliers and customers to collect necessary data; partners with up to 1,000 employees can limit what they give you to what the voluntary SME standard (VSME) covers. Use reasonable estimates where primary data isn't available, documenting your methodology.
• Quantitative metrics: Set up systematic collection for all required metrics — GHG emissions, energy, water, waste, workforce data, supply chain indicators.
• Qualitative disclosures: Prepare narrative descriptions of policies, governance, strategy, and risk management processes.
• Forward-looking information: ESRS requires targets, transition plans, and financial effects projections. This requires scenario analysis and strategic planning.
• XBRL tagging preparation: Tagging becomes mandatory once the Commission adopts the tagging rules; choose a reporting platform that supports the ESRS XBRL taxonomy.

Step 5: Prepare Narrative Disclosures

ESRS narrative requirements are extensive. Key areas:

ESRS 2 — General Disclosures (always required):

• Basis for preparation (scope, value chain, time horizons)
• Governance structure for sustainability matters
• Strategy and business model in relation to sustainability
• Impact, risk, and opportunity identification and management process
• Materiality assessment methodology and results

For each material topical standard:

• Policies and commitments
• Actions and resources deployed
• Targets and progress
• How the topic connects to strategy and business model

Write with specificity. "We have a climate policy" is insufficient. ESRS requires describing the policy's scope, objectives, implementation mechanisms, monitoring approach, and how it addresses material impacts.

Step 6: Prepare for Assurance

CSRD mandates limited assurance from day one:

• Engage your assurer early: Ideally 12+ months before reporting deadline
• Internal controls: Establish documentation and controls over sustainability data comparable to financial controls
• Audit trail: Maintain source documentation for every datapoint
• Process documentation: Document data collection, calculation, and validation procedures
• Management representations: Prepare for formal management assertions about the sustainability statement

Common assurance findings to avoid:

• Incomplete documentation of data sources
• Inconsistent application of methodologies across entities
• Missing value chain data with insufficient estimation documentation
• Materiality assessment not sufficiently documented

Step 7: Integrate into Management Report

CSRD requires sustainability information in the management report, not a separate document:

• Include the sustainability statement as a dedicated, identifiable section
• Ensure consistency between financial and sustainability information
• Apply XBRL tagging per the ESRS taxonomy once the tagging rules are adopted
• Include the assurance opinion

The management report structure with sustainability information should be coherent — cross-reference between financial and sustainability sections where relevant.

Step 8: Review, Approve, and File

• Internal review: Legal, finance, sustainability, and business unit review cycles
• Board approval: The board approves the management report including sustainability statement
• External assurance: Final assurance engagement and opinion
• Filing: Submit with annual financial statements per national transposition requirements

How Council Fire Can Help

Council Fire guides organizations through CSRD implementation — from double materiality assessment through ESRS gap analysis, data system design, narrative drafting, and assurance readiness. Contact us for CSRD support.