CSRD and Sustainability Reporting – What Applies Now?

From carbon emissions to equality and working conditions, CSRD raises the bar for how companies report their impact on people and the environment. At the same time, the EU’s Omnibus package has significantly changed the playing field. So what applies now? Which companies are affected? And what role does HR play? Here’s what you need to know.

Green, climate-smart and circular. Ethical supply chains and fair working conditions. Sustainability has never been higher on the agenda. And if, like many others, you find the maze of abbreviations and terminology difficult to navigate, you are not alone. What will your company need to report, and when? In this article, we take a closer look at sustainability reporting, with a particular focus on CSRD.

What Is CSRD?

Let’s start with the basics: what does CSRD stand for? CSRD is short for the Corporate Sustainability Reporting Directive. It introduces stricter requirements for how companies report their environmental and social impact. The directive replaces the previous sustainability reporting framework introduced in 2014 and forms part of the European Green Deal, which aims to make the EU climate-neutral by 2050.

On 29 May 2024, the Swedish Parliament approved new rules on sustainability reporting (article in Swedish) implementing CSRD into Swedish law. The legislative changes entered into force on 1 July 2024.

Since then, the EU has adopted extensive simplifications as part of the so-called Omnibus package. Among other things, this means that significantly fewer companies will be subject to mandatory reporting than originally planned. In Sweden, work is currently under way to adapt national legislation to the new EU rules.

What Is the Purpose of the New Rules?

A bit like comparing apples and oranges. That is one way of describing the challenge with sustainability reporting historically, where companies have often measured and presented information in different ways.

Previously, there was no common, detailed reporting standard specifying exactly what a sustainability report should contain. As a result, companies had considerable freedom to decide what to include and what to leave out.

With CSRD and the common European Sustainability Reporting Standards, ESRS, reporting becomes much more standardised. Companies that fall within the scope of the directive use the same reporting standards, while the double materiality assessment determines which sustainability topics are relevant to each individual company.

By making reporting more consistent, it becomes easier for investors, customers and the public to compare how different companies perform on sustainability.

Do All Companies Have to Report Under CSRD?

No. Following the EU’s latest changes, significantly fewer companies are covered than originally planned.

In short:

• More than 1,000 employees and net turnover above EUR 450 million. At EU level, companies generally need to meet both criteria to fall within the scope of CSRD.
  
  
• New rules from 2027. For companies that are in scope, the rules will apply to financial years beginning on or after 1 January 2027.
  
  
• Swedish legislation is on the way. The new EU rules have not yet been fully implemented into Swedish law. A Swedish legislative proposal has been prepared and is currently being considered.
  
  
• Smaller companies can report voluntarily. VSME is a voluntary standard for companies that are not covered by CSRD but still want to report sustainability information in a structured way.
  
  
• Smaller companies also receive stronger protection. The new rules limit how much sustainability information larger reporting companies can require from smaller companies in their value chain.

What Has to Be Reported?

Climate and the environment are probably the first things that come to mind when you hear the word sustainability. But you may also be familiar with the term ESG, which highlights the fact that sustainability goes far beyond environmental issues.

ESG stands for Environmental, Social and Governance. These are also the three broad areas covered by CSRD reporting, so let’s take a closer look at each of them:

• Environmental: This includes areas such as climate change, pollution, water and marine resources, and biodiversity.
  
  
• Social: This includes equality, diversity, human rights, equal treatment and working conditions across the company’s operations.
  
  
• Governance: This covers areas such as the role and composition of the board, anti-corruption and anti-bribery efforts, regulatory compliance and so-called due diligence – in other words, how the company systematically identifies and manages negative impacts on people and the environment.

What Are the Biggest Changes Under CSRD?

It is clear that the rules around corporate sustainability reporting have changed. But what exactly is new under CSRD? Here are the key points to keep in mind:

• New thresholds determine which companies are covered. CSRD was originally intended to apply to significantly more companies than previous rules. Following the EU’s Omnibus reform, the scope has been substantially reduced. In general, companies with more than 1,000 employees and net turnover above EUR 450 million are now covered.
  
  
• Clear rules – but in a simplified form. One of the major changes introduced by CSRD is the European Sustainability Reporting Standards, or ESRS, which provide a common framework for sustainability reporting. In July 2026, the European Commission adopted a simplified version of the standards, with the aim of reducing the number of mandatory data points and making reporting less complex. The new standards are expected to apply to financial years beginning on or after 1 January 2027.
  
  
• Double materiality – looking at sustainability from two perspectives. Companies must assess sustainability from two directions: how their business affects people and the planet, and how sustainability issues, such as climate change, may affect the company financially.
  
  
• Stricter assurance requirements. A company’s sustainability report must be reviewed by an auditor or another external assurance provider to help ensure the quality of the reported information.
  
  
• Annual Report + Sustainability Report = One. To further increase transparency, the sustainability report becomes an integrated part of the annual report. It must also be made available in a digital format.

What Does This Mean for HR?

So where does HR come into the picture? As we have already touched on, CSRD requires companies to report not only on environmental and climate-related issues, but also on their own workforce and other social sustainability matters.

For HR, this means being able to provide reliable workforce data. Depending on which topics are considered material to the company, this may include:

• number of employees, gender distribution and different types of employment
• employee turnover
• gender pay gaps and other remuneration-related metrics
• working conditions, occupational accidents and work-related ill health
• collective bargaining agreements and social dialogue
• training and skills development
• entitlement to family-related leave
• diversity, equal treatment and discrimination

This also makes it important for employers to have efficient processes and tools in place for collecting data and compiling relevant HR metrics.

Do you use Flex HRM? In our Knowledge Base, you can learn more about how the system provides data and support for reporting on areas such as social sustainability, business travel and other climate-related matters.

Learn more: How Flex HRM supports your CSRD efforts.

Simplify Sustainability Reporting With Flex HRM

Want to make sustainability reporting easier for your team? With Flex HRM, you get tools that help you keep track of everything from emissions linked to business travel to salary levels, workforce statistics and other HR metrics – all in one place.

With clear dashboards, flexible reporting and accessible statistics, you get a stronger foundation for making smarter and more sustainable decisions for both people and the planet.

And it doesn’t stop there. We continue to expand the system with new features and integrations, helping you stay one step ahead in your sustainability work.

Curious? Get in touch and we’ll be happy to tell you more!

Lost in the Sustainability Lingo? Here’s a Quick Glossary

ESG (Environmental, Social and Governance)
An umbrella term covering environmental, social and governance issues. ESG is commonly used to describe and assess a company’s sustainability work, as well as sustainability-related risks and opportunities.

CSRD (Corporate Sustainability Reporting Directive)
An EU directive requiring companies within its scope to report sustainability information in a more standardised way. Its purpose is to increase transparency and make companies’ sustainability reporting easier to compare.

ESRS (European Sustainability Reporting Standards)
The EU’s common sustainability reporting standards under CSRD. They set out which information companies must disclose on material sustainability matters.

VSME (Voluntary Sustainability Reporting Standard for SMEs)
A voluntary standard for smaller companies that want to report sustainability information in a structured and proportionate way, even if they are not subject to CSRD.

Double Materiality Assessment
A method used to identify the sustainability matters that are most relevant to a company. It considers both how the company affects the outside world, such as people and the environment, and how sustainability factors affect the company’s financial performance and business model. Double materiality is a central part of CSRD and helps determine which sustainability matters a company needs to report on.

Omnibus Package
A package of EU changes designed to simplify, among other things, sustainability reporting. For CSRD, the reform includes higher thresholds for which companies are covered, a revised timeline and simplified reporting standards. The key changes were adopted at EU level in 2026.