CSRDApplicability testEU

CSRD Applicability Test

This test helps decide whether an EU undertaking, listed issuer, parent group, or non-EU company group may fall into CSRD and ESRS sustainability reporting.

The page separates scope evidence from materiality work so teams do not start ESRS datapoint collection before proving the reporting boundary.

Author
Sorena AI
Published
May 9, 2026
Updated
Jul 26, 2026
Sections
5

Structured answer sets in this page tree.

Primary sources
11

Cited legal and guidance references.

Publication metadata
Sorena AI
Published May 9, 2026
Updated Jul 26, 2026
Overview

A starts with the legal entity or consolidated group, not with a sustainability topic. As of July 2026, Directive (EU) 2026/470 is enacted and changes the main Articles 19a and 29a scope from financial years beginning in 2027. Record the reporting year before applying thresholds, then test the undertaking or group, exemptions, listing and issuer facts, and the separate route for a non-EU parent with a qualifying EU subsidiary or branch.

Section 1

Step 1: identify the undertaking and reporting boundary

Start with the exact legal entity, parent undertaking, branch, or issuer. CSRD amended the Accounting Directive, so the first evidence record should show whether the entity is within the directive's undertaking types, is a public-interest entity, is a parent of a large group, or is a third-country undertaking with an EU subsidiary or branch.

For an EU group, test both standalone and consolidated status. A parent undertaking can be in scope through the consolidated large-group route even when the operating entity that collected the data is not the final reporting parent.

  • Record the legal name, Member State or third-country jurisdiction, company type, and whether the undertaking is governed by Member State law.
  • Record whether transferable securities are admitted to trading on an EU regulated market; listed micro-undertakings are treated differently from listed SMEs.
  • Record whether the test is for an individual sustainability statement under Article 19a, a consolidated sustainability statement under Article 29a, or a third-country sustainability report under .
  • Record whether a group exemption, subsidiary exemption, or national transposition rule needs local legal confirmation before the scope decision is final.
Section 2

Step 2: apply the threshold set for the reporting year

For ordinary undertaking-size classification, the consolidated Accounting Directive uses three criteria: balance sheet total, net turnover, and average employees during the financial year. A large undertaking exceeds at least two of the large-undertaking criteria; a medium-sized undertaking is not micro or small and does not exceed at least two of the medium-sized criteria.

Those Accounting Directive size categories explain the original CSRD waves, but they are no longer the complete current-scope test. Directive (EU) 2026/470 provides that, for financial years beginning in 2027, Articles 19a and 29a apply where the undertaking or parent group exceeds EUR 450 million net turnover and an average of 1,000 employees during the financial year. Keep turnover and headcount evidence together and confirm the amended rule in applicable national law.

  • For financial years before 2027, preserve the original wave and Accounting Directive classification used for that report. For financial years beginning between 1 January 2025 and 31 December 2026, also check whether the Member State used the Directive (EU) 2026/470 option to exempt an undertaking or issuer that does not exceed either EUR 450 million net turnover or 1,000 average employees.
  • From financial years beginning in 2027, test both amended main-scope conditions: more than EUR 450 million net turnover and more than 1,000 average employees.
  • For a parent undertaking, apply the amended conditions on a consolidated basis to the group and document any subsidiary exemption separately.
  • Check national transposition, issuer-specific rules, financial-sector provisions, and any exemption before treating the two-threshold screen as a final filing conclusion.
Section 3

Step 3: assign the CSRD phase-in wave and check later changes

The first CSRD companies applied the rules for the 2024 financial year, with reports published in 2025. The original directive placed other large undertakings and large-group parents in wave two and listed SMEs and specified financial undertakings in wave three. Directive (EU) 2025/794 then postponed the wave-two and wave-three application dates by two years.

Directive (EU) 2026/470 is the later enacted scope amendment, not merely an Omnibus proposal. It applies the narrowed Articles 19a and 29a scope from financial years beginning in 2027. Preserve the original wave analysis as history, but make the current reporting conclusion from the amended thresholds, exemptions, national law, and reporting year.

  • Wave-one evidence: public-interest entity status, large undertaking or large group status, and average employees above 500.
  • Historical-wave evidence: the original entity category, why the entity was not already in wave one, and whether Directive (EU) 2025/794 postponed its first application.
  • Current-scope evidence: financial year, net turnover, average employees, consolidated group calculation where relevant, exemption analysis, and Directive (EU) 2026/470 transposition.
  • Calendar evidence: national implementation, reporting year, management-report owner, assurance dependency, and local filing or annual-financial-report deadline.
Section 4

Step 4: check non-EU parent, subsidiary, and branch caveats

A non-EU group can have a separate CSRD-related reporting obligation even when the ultimate parent is not governed by Member State law. For financial years beginning in 2028, Directive (EU) 2026/470 raises the third-country undertaking threshold to more than EUR 450 million net turnover in the Union and the qualifying EU subsidiary or branch threshold to more than EUR 200 million net turnover.

This is not the same evidence package as an EU parent's Article 19a or 29a sustainability statement. Keep a separate record for the EU subsidiary or branch that will publish and make accessible the third-country parent report, the group-level turnover calculation, the branch turnover calculation if relevant, the assurance opinion, and any statement that required parent information was not made available.

  • Non-EU turnover evidence: EU net turnover above EUR 450 million and the measurement periods required by the amended route.
  • EU subsidiary evidence: subsidiary status and net turnover above EUR 200 million for the relevant financial year.
  • EU branch evidence: branch location, absence of the qualifying subsidiary for the branch route, and branch net turnover above EUR 200 million.
  • Report-content evidence: whether the report is prepared under the third-country undertaking standards, , or an accepted equivalent route when available.
Recommended next step

Turn the CSRD scope answer into reporting evidence

Use the applicability result to separate entity-scope evidence from ESRS materiality, datapoint, value-chain, and assurance work.

Primary sources

References and citations

eur-lex.europa.eu
Referenced sections
  • Grounds the size-category test and the current EUR 25 million, EUR 50 million, and 250 employee criteria shown in the consolidated directive.
"Large undertakings shall be undertakings which on their balance sheet dates exceed"
eur-lex.europa.eu
Referenced sections
  • Historical consolidated text for the original Article 40a thresholds and publication mechanics; Directive (EU) 2026/470 supplies the amended thresholds used above.
"generated a net turnover of more than EUR 150 million in the Union"
efrag.org
Referenced sections
  • EFRAG source for non-authoritative implementation support on materiality assessment, value-chain guidance, and ESRS datapoints.
"IG 1 Materiality Assessment, IG 2 Value Chain, and IG3 Detailed ESRS Datapoints"
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