CSRD Scope Narrowed: But Are You Still Required to Verify Sustainability Reporting?

CSRD Scope Narrowed: But Are You Still Required to Verify Sustainability Reporting?

A fundamental shift in scope 

The most significant change concerns scope. Under the original CSRD, thousands of companies faced mandatory reporting obligations based on the Accounting Directive’s definition of “large undertaking” – 250 employees and either €50 million in turnover or €25 million in total assets. That threshold has been replaced entirely. An EU entity is now in scope only if it exceeds both an average of 1,000 employees and a net turnover of €450 million. Listed SMEs are removed from mandatory scope completely. For non-EU parent entities, the trigger is even higher: more than €450 million in EU-generated turnover for two consecutive years, plus an EU subsidiary or branch with more than €200 million in turnover. 

What this means for verification 

If your organisation falls below these thresholds, you have no legal obligation to obtain assurance on sustainability reporting. However, market pressure from financial institutions, large customers, and investors has not disappeared. The Commission is preparing a voluntary reporting standard based on EFRAG’s VSME framework, designed specifically for entities that are no longer mandated to report. Early adoption of voluntary verification under VSME demonstrates proactive ESG governance and can differentiate your organization in procurement processes, financing negotiations, and stakeholder reporting. Many de-scoped organisations will choose to verify against this voluntary standard to maintain credibility with their value chain partners. 

Clarification of the assurance framework 

For entities that remain in scope, the assurance framework has been clarified. The possibility of moving towards reasonable assurance has been removed. Limited assurance is now confirmed as the final requirement, rather than a transitional step. The adoption of an EU-wide limited assurance standard has been postponed to 1 July 2027, with expectations of alignment with ISSA 5000. For organisations preparing their first reports, this means focusing on the fundamentals: data lineage, internal controls, and documentation that can withstand independent review. 

Updated reporting timeline 

The reporting timeline is now fixed. The “Stop-the-Clock” delays have been made permanent. Wave 2 entities that remain in scope will report for financial year 2027, with publication in 2028. Non-EU parents in scope will report for financial year 2028, published in 2029. Member States may exempt de-scoped Wave 1 entities from reporting for financial years 2025 and 2026, providing transitional relief where national governments choose to implement it. 

Simplification of ESRS 

The European Sustainability Reporting Standards (ESRS) are currently under revision. EFRAG delivered simplified technical advice to the Commission in December 2025, proposing a significant reduction in data points and a streamlined double materiality assessment. The revised ESRS are expected to be adopted by September 2026. Until then, the existing ESRS remain applicable. Our advice: do not wait for the simplified ESRS. The double materiality assessment remains the foundation of CSRD compliance, and the core work of preparing verifiable data traceability, controls, evidence chains does not change simply because some datapoints may be removed. Organizations beginning this work now build verification readiness regardless of which ESRS version ultimately applies. 

Implications of the value chain cap 

A further important development is the introduction of the “value chain cap.” Reporting companies cannot request sustainability information from protected undertakings – those with fewer than 1,000 employees – that exceeds the forthcoming voluntary VSME standard. These smaller entities have a legal right to refuse such requests.  

This has direct implications for verification, as assurance providers must ensure that reported data has been obtained in compliance with these restrictions. Failure to do so could raise questions regarding the validity of the report.

Moving forward 

The finalisation of the Omnibus Directive brings long-awaited clarity for organisations navigating the evolving sustainability reporting landscape. While the scope of mandatory reporting has narrowed, expectations around data quality, transparency, and credibility remain high. 

This transition period presents a valuable opportunity for organisations to reassess their current position, strengthen internal data processes, and ensure their reporting frameworks are robust and ready for independent assurance. Whether reporting is mandatory or voluntary, credible sustainability data will remain essential to maintaining stakeholder trust and meeting market expectations. 

Understanding how these regulatory changes impact your organisation is critical. Our team supports organisations through CSRD readiness assessments, gap analysis, and pre-verification services, helping you identify key risks, address non-conformities, and prepare effectively for future assurance requirements. 

Get in touch with our Sustainability team to receive a tailored assessment of your CSRD readiness under the final Omnibus rules.