CSRD reporting waves who reports first and what changed

Directive (EU) 2022/2464 set phased application dates by financial year. The first wave covered large public-interest entities and parent undertakings of large groups that exceeded the 500-employee condition. The second wave covered other large undertakings and parent undertakings of large groups. The third wave covered listed SMEs that are not micro-undertakings, plus listed small and non-complex institutions and captive insurance or reinsurance undertakings where the CSRD conditions are met.

The same directive also applied the third-country reporting provisions for financial years starting on or after 1 January 2028. That is a separate Article 40a route, not the same analysis as a normal EU large undertaking or listed SME wave.

The original wave rules remain useful history. Directive (EU) 2025/794 postponed the original wave-two and wave-three dates by two years. Directive (EU) 2026/470 then replaced the main scope from financial years beginning in 2027 with the EUR 450 million net-turnover and 1,000-employee tests. A current conclusion needs both steps and the applicable national law.

For financial years beginning in 2025 or 2026, Directive (EU) 2026/470 permits a Member State to exempt an undertaking or issuer that does not exceed either EUR 450 million net turnover or an average of 1,000 employees, on a consolidated basis where applicable, from specified amended requirements. The derogation applies only where the relevant Member State adopts it.

For a live entity assessment, keep the original CSRD wave, record whether the stop-the-clock measure and any national transition derogation affected it, test the entity against the amended scope, and verify the Member State implementation or issuer rules before changing a reporting plan. Directive (EU) 2026/470 requires Member States to transpose its CSRD amendments by 19 March 2027.

The listed SME opt-out belongs to the original CSRD transition rules. Under the earlier Article 19a(7), listed SMEs other than micro-undertakings could decline to report for financial years starting before 1 January 2028 if their management report briefly explained why. The Commission's 2024 FAQ describes that rule.

Directive (EU) 2026/470 deletes the listed-SME application category and Article 19a paragraphs 6 and 7. From financial years beginning in 2027, listed status alone does not bring an SME into the amended CSRD reporting scope. The main test is whether the undertaking, issuer, or group exceeds both EUR 450 million in net turnover and an average of 1,000 employees. Use the old opt-out only when analysing a financial year and national transition measure for which it still applied.

There are two different third-country questions. First, a third-country issuer with transferable securities admitted to trading on an EU regulated market can fall under the issuer route. For financial years beginning in 2027, Directive (EU) 2026/470 applies that route only when the issuer undertaking, or its group on a consolidated basis, exceeds both EUR 450 million net turnover and an average of 1,000 employees. For earlier financial years, check the applicable national implementation and transition rules. Under the issuer route, sustainability information belongs in the management report within the annual financial report.

Second, Article 40a covers certain third-country undertakings with a qualifying EU subsidiary or branch footprint. For financial years beginning in 2028, Directive (EU) 2026/470 requires the third-country undertaking to have generated more than EUR 450 million in EU net turnover in each of the last two consecutive financial years. The qualifying EU subsidiary must exceed EUR 200 million in net turnover in the preceding financial year. The same EUR 200 million threshold applies to a branch where the third-country undertaking has no qualifying EU subsidiary.

CSRD is a directive. Directive (EU) 2022/2464 required Member States to bring national laws, regulations, and administrative provisions into force and communicate those measures to the Commission. Directive (EU) 2026/470 sets a 19 March 2027 deadline for transposing its CSRD amendments. An EU-level wave analysis is necessary but may not answer filing, assurance-provider, register, publication, or sanction questions under national law.

Local-law confirmation is especially important where an entity is near a size threshold, uses the listed SME opt-out, relies on a stop-the-clock delay, has securities admitted to trading on an EU regulated market, or publishes an Article 40a third-country report through an EU subsidiary or branch.