How to align existing reports with CSRD requirements
The impact of the EU Corporate Sustainability Reporting Directive (CSRD) extends far beyond Europe. Changes ushered in by the Omnibus simplification package have meant it is not as comprehensive or far-reaching as first intended. But large organisations globally will still face additional reporting requirements over the next three years. Gradually incorporating the extra requirements over time enables a phased transition and avoids a last-minute rush for compliance.
CSRD requires companies to report on their most material issues, adopting a structured, evidence-based approach aligned with the European Sustainability Reporting Standards (ESRS). A phased approach enables companies to build on their current reporting, adapt to new requirements, and effectively align their approach across multiple frameworks. When first designing the ESRS, regulators aimed to make them interoperable with other standards, including those from the GRI SASB and the International Sustainability Standards Board (ISSB).. This means organisations can map existing disclosures to ESRS requirements rather than rebuilding their reporting system entirely.
Which companies must report under CSRD?
Throughout 2025, it was hotly debated which companies should report under CSRD. Given that, sustainability professionals should be excused for any ongoing confusion about which companies are in scope and which are not. So here’s a quick reminder of the requirements approved by the European Parliament in December 2025.
- 2025: EU-listed companies with 500+ employees required to report on activities from FY24 onwards.
- 2028: Non-listed EU businesses and large EU subsidiaries of non-EU businesses required to report on activities from FY27 onwards. ‘Large’ is defined as 1,000+ employees and turnover of €450m+. At this point, listed entities with 500-999 employees no longer have to report, as they don’t meet the threshold for a large business. Larger listed businesses can also revise their reports to align with the slimmed down ESRS.
- 2029: Non-EU companies that generated turnover of €450m+ in the EU in the previous two years and have a large EU subsidiary or a branch generating €200m+ in turnover are required to report on activities from FY28 onwards.
Understanding the CSRD and ESRS requirements
CSRD puts the principle of double materiality firmly at the heart of reporting. Companies must complete a double materiality assessment to determine the most important issues for their business — the ones on which they have to report publicly. The ESRS set out the detailed structure and content for those disclosures. The standards cover general disclosures as well as 10 topical standards — five environmental, four social and one governance topic — spanning climate, pollution, water, biodiversity, workforce, affected communities, and governance. Companies should also report on entity-specific topics that are material to their business. To date, companies have reported on an average of seven of the 10 topics, often adding artificial intelligence and cybersecurity as entity-specific topics.
What is double materiality?
Double materiality determines what matters to a business and its stakeholders. It considers:
- Impact materiality: How a company’s activities affect people and the planet (both positively and negatively) — sometimes described as the inside-out perspective, or impact material. .
- Financial materiality: How sustainability matters influence the company’s financial performance and enterprise value — the outside-in perspective or financial materiality.
Under CSRD, companies must report on issues that are material in terms of their impact, financial consequences or both. This differs from other framework, such as SASB or IFRS, which focus solely on financial materiality, or from the GRI Standards, which are founded on the principle of impact materiality while advocating companies increasingly move to a double materiality approach.Our article GRI Standards: What’s changing in 2026 provides further detail on how GRI integrates impact-based disclosures.
Key steps to a CSRD-aligned report
Step 1: Update your materiality assessment
Given the centrality of double materiality to CSRD, the first step towards a CSRD-aligned report is to revisit your materiality assessment. The ESRS outline a structured process, ensuring companies involve and incorporate the views of all stakeholders. This means working with employees and senior leadership across functions and business units to get their direct perspective. They can also represent the views of customers and suppliers in the process, supplementing direct engagement with external stakeholders — or acting on behalf of external groups where it is impractical to involve them. Companies must also explain the processes used to identify these topics and show clear links between their impacts, risks, and policy responses. This requires a formalised baseline regarding What Counts as a Material Impact Under CSRD to confirm compliance boundaries.
In 7 steps to conduct an effective double materiality assessment, we delve into best practice around assessing what matters to your business.
Step 2: Map your current report against ESRS requirements
With your double materiality assessment in place, you can start to develop the roadmap to a fully aligned report. For each of your material topics, map your current report against what you are required to disclose based on the draft simplified ESRS published in December 2025. The standards aren’t due to be finalised until mid-2026, but the December guidance is likely to be very close to the final standards.Many companies already structure their sustainability reports around familiar frameworks such as GRI or SASB. These frameworks overlap with ESRS, which means you are likely to have many of the base requirements covered — you only need to identify what’s additional.
ISSB’s IFRS S1 and S2 disclosure standards closely reflect the general and climate-related reporting requirements under CSRD, as we explain in IFRS S1 and S2 explained: What companies need to know.
Mapping exercises reveal where current disclosures already meet ESRS expectations and where updates or additional detail are required.
Step 3: Strengthen disclosure of governance, policies and due diligence
CSRD and ESRS require organisations to demonstrate that sustainability governance is embedded at the highest levels of decision-making. To do this, you need to provide detailed information in your report on:
- Roles and responsibilities for monitoring and managing sustainability topics.
- Board and executive level involvement in sustainability planning and execution.
- Consideration given to sustainability issues in strategic decision-making.
- Due diligence processes applied across the value chain.
- Review and approval of sustainability strategy, action plans and reporting.
Existing sustainability reports may address these issues, but often lack the level of specificity expected under the CSRD. Strengthening governance disclosures helps demonstrate accountability, helping satisfy stakeholder expectations and regulatory requirements.
Organisations must also describe their due diligence approach for environmental and social impacts. This closely aligns with established GRI disclosures. Companies familiar with GRI will find that their existing systems already capture elements of due diligence that feed into ESRS. Clearly linking these processes in the report helps demonstrate compliance.
Step 4: Integrate sustainability into strategy and risk management
Your reporting must demonstrate how sustainability is embedded into business strategy. That means having a clear explanation of how material impacts, risks and opportunities are taken into account in key areas. Be clear on how sustainability informs strategic and financial planning, resource allocation and procurement.
ESRS expects companies to address how these factors influence their long-term goals and investment decisions. Organisations may need to expand their disclosures to include more explicit references to scenario analysis, resilience assessments and risk management systems. Companies already aligned with TCFD and working towards IFRS S2 will have experience with climate scenario analysis, which stands them in good stead for CSRD alignment.
Step 5: Improve data quality and traceability
Prepare for the assurance requirements under CSRD by documenting the methodologies, definitions and data sources for each sustainability metric.
Strengthen internal data systems by ensuring:
- Clear ownership of data
- Clear and consistent definition of reporting boundaries
- Estimations and assumptions are backed by explanation and evidence
- Transparent data review processes
Preparing for external assurance is essential because CSRD requires limited assurance initially and may progress to reasonable assurance in future cycles. Companies must be ready to demonstrate that their sustainability data meets assurance standards.
Step 5: Update targets, action plans and performance indicators
Review your metrics and targets. You need to be able to measure progress against each of your material topics. You also want to be sure you are measuring what matters in a way that makes sense for the business. Existing sustainability reports may outline your goals, but best practice demands more precise descriptions of:
- Target setting
- Evidence supporting target selection
- Time horizons
- Baseline data
- Annual progress
- Alignment with external frameworks such as the Science Base Targets initiative.
Organisations must link targets to their materiality assessment and strategy. This creates a consistent and credible narrative that supports investor and stakeholder confidence.
How Context Sustainability helps companies align with CSRD
Context Sustainability works with organisations across industries as they continue to transition towards CSRD. We help clients evaluate their existing reports, complete gap analyses, update materiality assessments, and strengthen governance and data systems. Our support allows companies to create sustainability reports that reflect best practice and meet emerging regulatory expectations.
Our approach integrates expertise across multiple frameworks. We help companies align their GRI, SASB, and IFRS S2 disclosures with ESRS requirements, ensuring their reports remain clear, consistent and credible. Companies preparing for assurance also benefit from our guidance on documentation, internal controls, and evidence gathering.
Frequently Asked Questions
What is the most practical first step when updating a legacy sustainability report to meet CSRD standards?
The first step is conducting a formalised double materiality assessment to establish your baseline compliance boundaries. This process determines which specific European Sustainability Reporting Standards topical disclosures are relevant to your operations, preventing your team from collecting unnecessary metrics.
How does the CSRD framework alter the role of corporate board members regarding disclosures?
The directive places explicit legal accountability for sustainability reporting on the company’s administrative, management, and supervisory bodies. Board members must formally sign off on the data systems, risk management frameworks, and materiality choices, subjecting non-compliance to strict corporate governance penalties.
Can a company rely on its current Global Reporting Initiative data to satisfy European mandates?
While GRI data provides an excellent functional foundation due to high technical alignment with European standards, significant data gaps usually remain. Companies must expand their legacy GRI reporting to incorporate forward-looking targets, transition plans, and specific financial materiality risk calculations required by European rules.
Why does the directive mandate the use of the European Single Electronic Format for disclosures?
Standardising disclosures within a single digital format ensures all corporate sustainability reports are machine-readable and highly comparable. This allows asset managers, credit agencies, and regulators to easily extract, filter, and analyse sustainability information using automated data systems.
