CSRD for UK companies — who is in scope after the Omnibus

What CSRD is

The Corporate Sustainability Reporting Directive (CSRD) is the EU law — Directive (EU) 2022/24642 — that requires large companies operating in the EU to publish audited sustainability information in their management reports, prepared against the European Sustainability Reporting Standards (ESRS)4 and assessed through double materiality. It was adopted on 14 December 20222 and materially narrowed by the “Omnibus I” directive in 20261.

CSRD works by amending the EU Accounting Directive: in-scope companies report sustainability information alongside financial statements, subject to assurance2.

The disclosure content comes from the ESRS, adopted by the European Commission on 31 July 20238 as Commission Delegated Regulation (EU) 2023/27724.

The UK is not subject to CSRD domestically.

The UK regime is UK SRS S1 and S2, published by the Department for Business and Trade on 25 February 20266, applied to listed companies through FCA CP26/5.

UK companies encounter CSRD only through their EU footprint — the subject of this page.

The 2026 Omnibus rescope

The “Omnibus I” amending directive — Directive (EU) 2026/4701 — was published in the Official Journal of the European Union on 26 February 2026 and came into force on 18 March 20261. It materially narrows the scope of both CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD)1.

The headline change is the scope test.

EU companies now fall within CSRD only if they have more than 1,000 employees AND net turnover of at least €450 million — assessed on a consolidated basis for parent undertakings1.

Under the original directive the entry point was far lower, capturing large undertakings from 250 employees2.

Three further scope changes matter for planning1:

• Listed SMEs are removed from mandatory scope entirely [1]
• Certain financial holding companies are exempt [1]
• Companies outside the new thresholds are not required to report for financial years starting on or after 1 January 2027 [1]

For companies that reported in the first CSRD wave but now fall outside the thresholds, member states may provide an exemption for financial years starting between 1 January 2025 and 31 December 20261.

Whether that relief is available depends on each member state’s transposition choices.

Who is in scope now — EU entities

For EU-incorporated companies, the post-Omnibus position is a single cumulative test: more than 1,000 employees AND net turnover of at least €450 million1.

Parent undertakings apply the test at consolidated group level1.

Anyone who scoped a CSRD programme before 2026 should retest.

A company that qualified as a “large undertaking” under the 2022 directive2 may now sit entirely outside mandatory scope1 — and member states may exempt out-of-scope wave-one reporters for financial years starting 1 January 2025 to 31 December 20261.

How UK-headquartered groups get caught — the Article 40a route

The main route by which UK companies fall within CSRD is the third-country regime in Article 40a of the amended Accounting Directive1. It applies to non-EU parent groups — including UK-headquartered groups — from financial year 20281.

A UK group is in scope where both limbs are met1:

1. EU turnover limb — the group’s net turnover generated in the EU exceeds €450 million for each of the last two consecutive financial years1.
2. EU presence limb — the group has an EU subsidiary that qualifies as a large undertaking, or an EU branch whose net turnover exceeds €200 million1.

Where both limbs are met, the obligation is a group-level sustainability report covering the worldwide group’s impacts, published via the EU subsidiary or branch12.

First reports cover financial year 20281 — published in 2029 for calendar-year groups.

The two-consecutive-years condition on the turnover limb1 gives borderline groups a degree of stability: a single exceptional year of EU revenue above €450 million does not by itself trigger scope.

Groups near the line should monitor EU revenue by financial year now, because the FY2028 test looks backwards at the two preceding years1.

What UK subsidiaries of EU parents should know

The reverse situation is more common: a UK company owned by an EU parent that reports under CSRD.

The UK subsidiary has no direct CSRD obligation, but it sits inside the parent’s consolidated sustainability report2 and will be asked for data — emissions, workforce, value-chain impacts — assessed through the parent’s double materiality assessment4.

Since 18 March 2026 the first question is whether the EU parent is still in scope at all1.

Parents below the post-Omnibus thresholds (more than 1,000 employees and €450 million consolidated turnover) are not required to report for financial years starting on or after 1 January 20271 — some UK subsidiaries will find the group data request quietly disappears.

Where the parent remains in scope, the UK subsidiary’s data requirements are broader than UK regimes demand: ESRS impact materiality covers topics — pollution, biodiversity, value-chain workers — that UK SRS financial materiality6 does not reach.

UK subsidiaries already reporting under domestic regimes — see our guide to ESG reporting requirements in the UK — should build one data architecture serving both directions of reporting.

CSRD vs UK SRS at a glance

UK groups facing both regimes need to understand where they align and where they split.

The deepest divide is materiality: CSRD requires double materiality — financial and impact perspectives24 — while UK SRS follows the ISSB’s single, financial (enterprise-value) materiality6.

Our UK SRS vs CSRD comparison examines all ten dimensions in depth, and UK SRS vs ESRS compares the standards themselves clause by clause.

The climate layer is the area of greatest reuse: ESRS E1 and UK SRS S2 share ISSB-derived foundations46, so emissions and climate-risk data built for one substantially serves the other.

ESRS simplification — what UK groups will actually report against

Directive (EU) 2026/470 did not just cut scope — it mandated simplification of the ESRS themselves1.

A revised, shortened set of ESRS is under development by EFRAG5, and the requirement to produce sector-specific standards has been removed1.

Assurance was also adjusted: the planned escalation from limited to reasonable assurance has been dropped1.

For UK groups reporting from FY20281, this means the operative standards will be the revised ESRS rather than the 2023 set as adopted4 — worth building into implementation planning rather than mapping today’s full data-point list.

The double materiality architecture survives the simplification14.

Whatever the final shape of the revised standards, in-scope groups will still need the assessment process that determines which topics they report.

Frequently asked questions