CSRD reporting: what mid-market companies need to know

The Corporate Sustainability Reporting Directive (CSRD) is the European Union's mandatory sustainability disclosure framework. It replaces and significantly expands the older Non-Financial Reporting Directive (NFRD), and it captures far more companies than its predecessor ever did. If you're a mid-market industrial operating in or selling to the EU, this matters.

This is a working overview as of mid-2026. Some details continue to evolve.

Who's in scope

CSRD applies to:

• Large EU companies meeting two of three thresholds: more than 250 employees, more than €50M turnover, more than €25M total assets
• EU-listed SMEs (with a lighter regime)
• Non-EU companies with substantial EU activity (typically more than €150M EU turnover) — phased in over the late 2020s
• EU subsidiaries of non-EU groups, in many cases

The threshold for the "large company" tier was deliberately set low. Most clients we work with — manufacturers in the 200 to 2,000 employee range — fall in scope.

Timing

The reporting timeline is staggered:

• FY 2024 (reporting in 2025): companies already subject to NFRD
• FY 2025 (reporting in 2026): large EU companies above the size threshold
• FY 2026 (reporting in 2027): listed SMEs
• FY 2028 (reporting in 2029): non-EU companies with EU activity

If you've been doing voluntary disclosure for years, the practical change is modest. If you've been doing nothing, your runway is short.

What you have to disclose

CSRD requires reporting against the European Sustainability Reporting Standards (ESRS) — twelve cross-cutting and topical standards covering:

• Environment: climate change, pollution, water, biodiversity, circular economy
• Social: own workforce, value chain workers, affected communities, consumers
• Governance: business conduct

For each topical standard, you assess materiality — both impact materiality (your effect on people and the environment) and financial materiality (those topics' effect on your business). Only material topics require full disclosure, but the assessment itself must be defensible.

The assurance requirement

CSRD requires limited assurance on sustainability disclosures from the first year, with a planned move to reasonable assurance in subsequent years.

This is the requirement most clients underestimate. Limited assurance means your auditor expresses an opinion that nothing material is misstated. Reasonable assurance means they express a positive opinion that the disclosures are accurate. The evidence requirements escalate accordingly.

In practice: budget 20 to 40 percent of your sustainability reporting effort on assurance preparation. That includes documenting methodology, maintaining audit trails for every number, and supporting the auditor through a multi-week review.

What changes practically

For a typical mid-market manufacturer with no prior ESG reporting:

Year minus one (now). Gap analysis, materiality assessment, data system audit. Identify what data exists, what data doesn't, and what process changes are needed to collect what's missing. Three to six months.

Year zero (reporting year). Operate the new data collection processes for a full fiscal year. Engage with an assurance provider early. Draft disclosures quarterly so the year-end report isn't a marathon.

Reporting year (the next calendar year). Final reporting, assurance engagement, board review, publication.

The biggest cost is the first year. Year two through five is incremental.

Common pitfalls

Treating it as a reporting exercise. It's a data collection exercise. The reports are the easy part. Building reliable upstream data pipelines is where 80% of the cost sits.

Hiring the wrong help. Big-four advisory teams will quote large numbers and deliver to template. Smaller specialist consultancies are usually faster and more honest. Be careful with the "ESG software" vendors — most are reporting tools, not data collection systems.

Late assurance engagement. Audit firms have limited CSRD-trained capacity in the early years. Booking your auditor twelve months before reporting is normal; six months is risky; three months is too late.

Materiality theater. Performing the materiality assessment as a checkbox exercise produces reports that don't reflect actual business priorities and fail audit scrutiny. Treat materiality as the strategic exercise it actually is.

What we'd recommend

If you're a mid-market industrial in scope and haven't started yet: don't panic, but don't delay. Start with a 30-day gap analysis to understand what you have and what you'd need. Engage an experienced specialist consultancy. Budget realistically.

We are, full disclosure, a specialist consultancy in this space, and we welcome enquiries. We are also genuinely happy to point you toward competitors when our calendar is full — the field has a serious capacity problem, and most legitimate practitioners would rather see good work done elsewhere than no work done at all.