CSRD and sustainability reporting

What is the CSRD?

The Corporate Sustainability Reporting Directive (CSRD), Directive (EU) 2022/2464, governs corporate sustainability reporting. It strengthened the previous NFRD framework to make information on companies’ impacts and sustainability-related risks and opportunities more comparable.

Reporting is not a certification that a company is sustainable. It describes policies, actions, targets and results through verifiable information. See the European Commission’s official CSRD overview.

Scope and recent changes

The framework has changed through Omnibus I. The amendment approved by the Council on 24 February 2026 narrows the EU scope to companies with more than 1,000 employees and over €450 million in annual net turnover. It also includes specific rules for non-EU groups and transitional measures.

These thresholds do not mean immediate applicability to every Italian company. National transposition, reporting year, group structure and exemptions must be checked. The original thresholds and timetable are no longer a sufficient guide. Source: Council of the European Union.

ESRS and double materiality

The European Sustainability Reporting Standards (ESRS) define the information to report. Double materiality considers both a company’s impacts on people and the environment, and sustainability risks and opportunities that may affect its financial position and performance.

On 3 July 2026, the Commission adopted revised ESRS and a voluntary reporting standard for companies protected by the value-chain cap. For operational use, check the final published legislation and its application dates. Source: European Commission.

CSRD and circular economy

ESRS E5 addresses resource use and circular economy. Reporting on topics must be linked to the materiality assessment: E5 should not be described as an identical, automatic obligation for every company.

Circularity work requires data on resource inflows, product and material outflows, waste and value-retention strategies. These data can inform ecodesign, reuse, repair and recovery, but reporting alone does not demonstrate environmental improvement.

Companies outside the mandatory scope can also benefit from proportionate circularity measurement, starting with available data and the decisions they need to make.

Updated: September 2026. This educational overview does not replace an assessment of the obligations applicable to an individual company.

Connecting impacts, risks and opportunities

Double materiality connects two different perspectives. A company may contribute to environmental pressures through the extraction of the materials it buys. At the same time, scarcity, price volatility or reliance on a small number of suppliers may affect its results. Looking only at internal emissions or procurement costs misses important parts of the picture.

Consider an illustrative furniture manufacturer using panels, metals and upholstery. Relevant questions include material origin and quantities, product durability and repairability, scrap recovery and end-of-use management. Economic considerations may include material availability, disposal costs and repair-service opportunities. Actual relevance must be assessed for the business, not assumed solely from its sector.

Organising data before preparing the report

A useful process starts by mapping flows and responsibilities: procurement for inputs, production for scrap, logistics for returns and packaging, and design for product characteristics and durability. Each indicator needs a unit, reporting period, boundary, source and calculation method. Estimates may be necessary, but they should remain distinguishable from direct measurements.

Boundaries matter. One facility’s data does not automatically describe a group; the recycled content of one component does not represent the whole product. Changes in scope or methods need to be explicit. Otherwise, year-on-year comparisons may suggest improvements that result only from a change in how information is collected.

From reporting to decisions

Operational value comes when data informs action: redesigning packaging, reducing a process loss, introducing maintenance or building a reuse chain. Each action needs an owner, resources, a measured starting point and progress indicators. Publishing a target does not demonstrate that it has been achieved.

Businesses outside the mandatory scope may still find it useful to prepare proportionate information for customers, partners and finance providers. This does not mean automatically applying all large-company obligations. It is important to distinguish legal requirements, commercial requests and information genuinely needed to manage the organisation.

AI can help classify documents and flag inconsistencies, but it does not replace accountability for data or verification of claims. Our AI & Circular Economy guide explains when it may be useful.