Scope and application dates

Comparison NFRD/CSRD

The NFRD included public-interest entities¹ with more than 500 employees, including listed companies, banks, insurance companies, and other companies designated by national authorities as public-interest entities.

The CSRD would greatly increase the scope to all large companies and all companies listed on EU regulated markets (except listed micro-enterprises). The scope would include companies established in third countries that are listed on EU regulated markets, as well as EU subsidiaries of third country companies. Subsidiaries that are included in the consolidated management report of their parent undertaking will be exempt from reporting under the CSRD, as long as the reporting meets EU standards. This also applies for third country parent undertakings that are reporting sustainability information on the basis of equivalent third country regulatory requirements/sustainability reporting standards. Parent undertakings reporting on behalf of a group should include information relating to the entire group (not just its own).

Required disclosure	Voluntary disclosure
Banks	Private companies
Listed companies	SMEs
Insurance companies
Public-interest entities

The table below presents the entities subject to the CSRD reporting requirements in more detail.

Type of entities	Scope
Listed companies	All undertakings listed on a regulated market, regardless of their legal form. Exemptions: The CSRD does not apply to micro-undertakings, i.e., undertakings which do not exceed the limits of at least two of the following three criteria: Balance sheet total: EUR 350,000; Net turnover: EUR 700,000; Maximum of 10 employees. The Directive does not apply to subsidiary undertakings with regards to the obligation to report non-financial information where such undertakings and their subsidiary undertakings are included in the consolidated management report of their parent undertaking, if the information is reported equivalent to EU standards.
Non-listed companies	Large undertakings that meet at least two of the following three criteria: At least 250 employees; Balance sheet total: EUR 20 million; Net turnover: EUR 40 million. Exemptions: As mentioned above, all subsidiary undertakings are exempt from the obligation to report non-financial information where such undertakings and their subsidiary undertakings are included in the consolidated management report of their parent undertaking, if the parent is reporting to equivalent EU standards.
Credit institutions and insurance undertakings	Regardless of their legal form, the following are in scope: Credit institutions as defined in Art 4(1)(1) of Regulation (EU) No 575/2013, and Insurance undertakings as defined in Art 2(1) of Directive 91/674/EEC Member States may choose to disapply the requirements to certain categories of credit institutions, e.g., central banks.
Non-EU undertakings²	Non-EU undertakings generating a net turnover of at least EUR 150 million in the EU and which have at least one subsidiary or branch in the EU.

Proposed application dates²

The application of the CSRD will take place in three stages:

For undertakings already subject to non-financial reporting under NFRD (i.e., PIEs): application on 1 January 2024 (reporting in 2025 for financial years starting on or after 1 January 2024).
For large undertakings³ that were not subject to non-financial reporting under NFRD, and parent undertakings of large groups: 1 January 2025 (reporting in 2026 for financial years starting on or after 1 January 2025).
For EU SMEs⁴ listed on a regulated market: 1 January 2026 (reporting in 2027 for financial years starting on or after 1 January 2026) but potential to extend to 2028. An opt-out will be possible for SMEs during a transitional period, meaning that they will be exempted from the application of the Directive until 2028.

The deadline for the transition to reasonable assurance of sustainability reporting (Article 26a of the Audit Directive) will enter into force 6 years after the entry into force of the CSRD. This will follow the adoption by the European Commission (by means of delegated acts) of: (i) limited assurance standards before 1 October 2026; and (ii) assurance standards for reasonable assurance no later than 1 October 2028, following an assessment to determine if reasonable assurance is feasible for auditors and for undertakings.

1. “Public-interest entity” means undertakings (a) governed by the law of a Member State and whose transferable securities are admitted to trading on a regulated market of any Member State, (b) credit institutions, (c) insurance undertakings, (d) designated by Member States as public-interest entities, for instance undertakings that are of significant public relevance because of the nature of their business, their size, or the number of their employees.

2. According to the European Parliament press release of 21 June 2022

3. “Large company” means a company that meets at least two of the following three criteria:
– At least 250 employees;
– Balance sheet total: EUR 20 million;
– Net turnover: EUR 40 million.

4. “Small company” means an entity which on its balance sheet dates does not exceed the limits of at least two of the following three criteria:
– Balance sheet total: EUR 4 million;
– Net turnover: EUR 8 million;
– Average number of employees during the financial year: 50.

“Medium-sized company” means entities which are not micro-undertakings or small undertakings and which on their balance sheet dates do not exceed the limits of at least two of the following three criteria:
– Balance sheet total: EUR 20 million;
– Net turnover: EUR 40 million;
– Average number of employees during the financial year: 250.