{"id":11827,"date":"2026-02-26T18:48:08","date_gmt":"2026-02-26T18:48:08","guid":{"rendered":"https:\/\/generationimpact.global\/?p=11827"},"modified":"2026-09-12T21:24:57","modified_gmt":"2026-09-12T21:24:57","slug":"directive-eu-2026-470-csrd-csddd-reform","status":"publish","type":"post","link":"https:\/\/generationimpact.global\/blog\/directive-eu-2026-470-csrd-csddd-reform\/","title":{"rendered":"Sustainability reporting and Due Diligence in the EU after Directive (EU) 2026\/470"},"content":{"rendered":"\n

Directive (EU) 2026\/470<\/a>, adopted on 24 February 2026 and published in the Official Journal on 26 February 2026, amends EU corporate sustainability reporting and corporate sustainability due diligence rules by narrowing scope, introducing value chain protections, removing the transition to reasonable assurance, and reshaping the Corporate Sustainability Due Diligence Directive (CSDDD).<\/p>\n\n\n\n

The reform restructures the EU sustainability framework while preserving its core architecture.<\/p>\n\n\n\n

Key regulatory changes<\/strong><\/h2>\n\n\n\n

CSRD scope: new mandatory thresholds<\/h3>\n\n\n\n

Mandatory sustainability reporting now applies only to undertakings that exceed both:<\/p>\n\n\n\n

    \n
  • \u20ac450,000,000 net turnover, and<\/li>\n\n\n\n
  • More than 1,000 employees on average during the financial year.<\/li>\n<\/ul>\n\n\n\n

    Both criteria must be met cumulatively.<\/p>\n\n\n\n

    Rule<\/th>Scope test<\/th><\/tr><\/thead>
    CSRD (EU undertakings)<\/td>\u20ac450 million net turnover and more than 1,000 employees. Both must be met.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    The revised scope applies to individual undertakings, groups, insurance undertakings, and credit institutions.<\/p>\n\n\n\n

    The reporting perimeter is therefore concentrated on the largest economic actors.<\/p>\n\n\n\n

    Listed SMEs removed from mandatory reporting<\/h3>\n\n\n\n

    Small and medium-sized undertakings whose securities are admitted to trading on a regulated market are excluded from mandatory sustainability reporting.<\/p>\n\n\n\n

    The empowerment to adopt SME-specific sustainability reporting standards is removed.<\/p>\n\n\n\n

    Voluntary sustainability reporting remains available through standards for voluntary use.<\/p>\n\n\n\n

    Value chain cap: statutory protection for suppliers<\/h3>\n\n\n\n

    Directive (EU) 2026\/470 introduces formal protections for undertakings in the value chain with up to 1,000 employees (\u201cprotected undertakings\u201d).<\/p>\n\n\n\n

    Reporting undertakings:<\/p>\n\n\n\n

      \n
    • May rely on supplier self-declaration of size.<\/li>\n\n\n\n
    • Are not required to verify it unless manifestly incorrect.<\/li>\n\n\n\n
    • Must not require information exceeding voluntary standards.<\/li>\n\n\n\n
    • Must inform protected undertakings if requested information exceeds those standards.<\/li>\n\n\n\n
    • Are deemed compliant if they respect these limits.<\/li>\n<\/ul>\n\n\n\n

      Any contractual clause requiring information beyond these limits for CSRD reporting purposes is not binding.<\/p>\n\n\n\n

      This provision limits ESG data extraction within supply chains and creates a statutory refusal right for smaller undertakings.<\/p>\n\n\n\n

      ESRS revision mandate<\/h3>\n\n\n\n

      Within six months of entry into force, the Commission must revise the first set of European Sustainability Reporting Standards to:<\/p>\n\n\n\n

        \n
      • Remove less relevant datapoints,<\/li>\n\n\n\n
      • Prioritise quantitative disclosures where possible,<\/li>\n\n\n\n
      • Clarify the application of the materiality principle,<\/li>\n\n\n\n
      • Distinguish mandatory from voluntary datapoints,<\/li>\n\n\n\n
      • Improve interoperability with international standards.<\/li>\n<\/ul>\n\n\n\n

        Mandatory sector-specific standards are removed. The Commission may issue sector-specific guidance instead.<\/p>\n\n\n\n

        Assurance framework<\/h3>\n\n\n\n

        The Commission must adopt limited assurance standards by 1 July 2027. The obligation to transition to reasonable assurance standards is removed.<\/p>\n\n\n\n

        Limited assurance therefore becomes the structural ceiling unless future legislation changes the framework.<\/p>\n\n\n\n

        For third-country auditors issuing sustainability assurance reports, a transitional registration regime applies for financial years between 1 January 2025 and 31 December 2030.<\/p>\n\n\n\n

        Omission of sensitive information<\/h3>\n\n\n\n

        Undertakings may omit sustainability information, subject to assurance, where disclosure would:<\/p>\n\n\n\n

          \n
        • Seriously prejudice commercial position,<\/li>\n\n\n\n
        • Reveal trade secrets,<\/li>\n\n\n\n
        • Disclose classified information,<\/li>\n\n\n\n
        • Breach confidentiality obligations under Union or national law,<\/li>\n\n\n\n
        • Endanger privacy or security, including defence-related sensitivities.<\/li>\n<\/ul>\n\n\n\n

          This formalises proportionality and security safeguards within sustainability reporting.<\/p>\n\n\n\n

          Digital reporting clarification<\/h3>\n\n\n\n

          Until digital marking-up rules for sustainability reporting are adopted under the EU electronic reporting framework, undertakings are not required to digitally tag sustainability reporting.<\/p>\n\n\n\n

          This reduces immediate digital implementation burdens.<\/p>\n\n\n\n

          Third-country reporting thresholds increased<\/h3>\n\n\n\n

          The directive raises:<\/p>\n\n\n\n

            \n
          • The third-country parent turnover threshold in the Union to \u20ac450,000,000, and<\/li>\n\n\n\n
          • The subsidiary or branch turnover threshold to \u20ac200,000,000.<\/li>\n<\/ul>\n\n\n\n

            This narrows the extraterritorial reach of the reporting regime.<\/p>\n\n\n\n

            Rule<\/th>Threshold<\/th><\/tr><\/thead>
            Third-country parent in the Union<\/td>Union turnover \u20ac450 million<\/td><\/tr>
            EU subsidiary or branch<\/td>Turnover \u20ac200 million<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
            Date<\/th>What happens<\/th><\/tr><\/thead>
            24\u201326 February 2026<\/td>Directive (EU) 2026\/470 adopted and published<\/td><\/tr>
            Within 6 months of entry into force<\/td>Commission revises ESRS<\/td><\/tr>
            1 July 2027<\/td>Limited assurance standards; no transition to reasonable assurance<\/td><\/tr>
            1 January 2025 \u2013 31 December 2030<\/td>Third-country auditor transitional registration<\/td><\/tr>
            26 July 2029<\/td>CSDDD applies to in-scope companies<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

            Page updated: 12 September 2026.<\/em><\/p>\n\n\n\r\n\t\t

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            Key Dates \u00b7 2026 \u2013 2029<\/strong><\/p>\n\n\r\n\t\t\t \r\n\t\t<\/div>\r\n\t\n\n\r\n\t\t

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