We are nearly a month and a half into the first year where some EU companies are required to publish reports that are aligned with the Corporate Sustainability Reporting Directive (CSRD). European sustainability reporting used to be narrative-based, but now has become more structured and standardised.
It marks a shift in how organisations are expected to measure, manage, and disclose their environmental impact. The CSRD replaces the Non-Financial Reporting Directive (NFRD), raising the bar for sustainability reporting disclosures by mandating Scope 3 emissions disclosure and introducing double materiality. While reporting deadlines may feel distant for some, the work needed to meet them is not.
Carbon data takes time to build properly and organisations that start now will find CSRD both manageable and valuable. Those that wait risk compressed timelines, higher costs, and increased scrutiny.
CSRD significantly expands the scope of sustainability reporting in Europe. At its core, it requires organisations to disclose Scope 1, Scope 2, and relevant Scope 3 emissions, alongside governance, strategy, risks, and transition plans under the European Sustainability Reporting Standards (ESRS).
The timelines can feel confusing, so let’s break it down. CSRD is being implemented through national law across EU Member States, and the recent “Stop-the-Clock” Directive has postponed some reporting obligations, particularly for large EU companies not previously reporting under NFRD. In many cases, first mandatory reporting periods are now FY2027 or FY2028.
What has not changed is the need to prepare. Building reliable Scope 1 and 2 data takes time, and developing credible Scope 3 emissions data can take years, particularly where supplier engagement is required.
| Company type | Who is included | First reporting period | Report deadline | What this means |
| Large EU companies already reporting under NFRD | Large public-interest entities (e.g. listed companies, banks, insurers) previously subject to NFRD | FY2024 | 2025 | These organisations are already required to report under CSRD. Focus has shifted from starting on sustainability reporting to improving data quality, Scope 3 coverage, and audit readiness. |
| Large EU companies not previously reporting | EU companies with at least 2 of the following: >250 employees, >€50m turnover, >€25m total assets |
FY2025-27 (in many cases postponed to FY 2027 due to EU “stop-the-clock” measures, subject to national transposition) | 2026–2028 | Even with delays, data foundations must be built now. Waiting until the formal reporting year creates significant delivery and assurance risk. |
| Listed SMEs | Small and medium-sized companies listed on EU-regulated markets | FY 2026 (with opt-out allowed until FY 2028) | 2027–2029 | Listed SMEs can defer, but will face early value chain pressure to provide CSRD-aligned data ahead of mandatory reporting. |
| Non-EU companies with significant EU activity | Non-EU companies generating >€150m turnover in the EU and with at least one EU subsidiary or branch | FY 2028 | 2029 | CSRD applies at group level, even if headquarters are outside the EU. Early scoping and data alignment across regions is critical. |
Important note: This is not a legal assessment. CSRD applicability depends on group structures and national implementation. Many organisations first encounter CSRD through value-chain data requests from customers, investors, or partners long before they are formally required to publish a CSRD report.
Establish Your Carbon Reporting Boundaries
Before calculating emissions, organisations need clarity on what sits inside their reporting boundary. Getting this wrong creates downstream rework, particularly once assurance is introduced.
First, companies must choose a consolidation approach for their organizational boundary. It is recommended that this aligns with the one used for your financial accounting. Under the Greenhouse Gas Protocol, which outlines the methodology for emissions reporting, the approaches are either based on:
Equity share – emissions are accounted for according to a company’s economic stake in the operation
Financial control – if a company can direct policies of an operation for economic benefit from its activities, they must account for 100% of the emissions from these operations
Operational control – if a company has full authority to introduce and implement operating policies at the operation, they must account for 100% of these emissions
Next, companies must run a double materiality assessment on financial risk and volume of emissions, particularly across the various Scope 3 categories, to identify the most significant activities and where early reporting effort should be focused.
Once you have identified your reporting boundaries, it is key to build consistent data collection processes across your organisation to enable repeated emissions calculations year-on-year.
Scope 1: Direct Emissions
Scope 1 accounts for direct emissions from sources owned or controlled by organisation, such as on-site fuel use, emissions from company-owned vehicles, and process emissions where applicable.
The priority at this stage is identifying assets and activities in scope, based on your consolidation approach. While Scope 1 is often seen as straightforward, under CSRD the methodologies and assumptions used must be clearly documented and defensible.
Scope 2: Purchased Electricity
Scope 2 are the indirect emissions from the generation of electricity, heating, cooling, and steam purchased for own use.
Organisations need reliable consumption data, a clear understanding of how energy is procured across sites, and well-documented decisions on location-based and market-based reporting. Treatment of renewable contracts and certificates also needs to be consistent and transparent, particularly as market-based claims are facing wider scrutiny.
Scope 3: Value-chain
Scope 3, which covers your upstream and downstream indirect emissions, has 15 different categories, so let’s keep this brief…
For most organisations, Scope 3, represents the lion’s share of their carbon footprint. Under CSRD, it can no longer be treated as optional. Scope 3 disclosure is central to value-chain transparency and managing commercial and reputational risk.
Early focus should be placed on the categories deemed most significant through the double materiality assessment. Companies can start by using estimation methods at first. By engaging your suppliers and customers sooner rather than later, you can improve data quality and enable value-chain emissions reductions.
Beyond Compliance: Turning CSRD Into a Strategic Advantage
When approached early, carbon measurement supports decision-making which improves operational efficiency and informs long-term transition planning. Organisations that delay will end up spending more time explaining the data gaps, rather than using the data to improve performance. The sooner that processes for calculations are established, the sooner True can help turn your data into tangible action.
CSRD may feel complex, but it is navigable with the right structure and support. Starting now gives organisations the time and confidence to turn compliance into clarity.