The EU’s CSRD and CSDDD are Now Simplified. Here’s What That Actually Means for Your Company.

The European Commission’s finalized amendments to the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) came into force on March 18, 2026. The changes aimed to simplify reporting rules, and for companies with EU operations, the headlines may seem to offer relief: higher thresholds for company size, delayed timelines, fewer requirements.

Here are three pieces of advice to help understand what “simplified” actually means before changing your compliance strategy.

Know What the Revised Thresholds Actually Change: Fewer Small Companies, Consistent Key Requirements

For companies that meet the revised thresholds, many core compliance requirements are unchanged. For CSRD these include double materiality, which is one of the most demanding aspects of the Directive, and the requirement to obtain limited assurance for the sustainability statement. These requirements were retained to ensure that sustainability disclosures continue to provide reliable and comparable information for stakeholders and capital markets.

The revised CSDDD thresholds are also significantly altered and have been raised to over 5,000 employees and €1.5 billion in worldwide annual turnover. Companies within the revised scope are still required to conduct due diligence to assess potential human rights impacts, although the process is less expansive than previously required. The revised framework adopts a risk-based approach, focusing due diligence efforts on a company’s own operations, subsidiaries, and direct business partners, with deeper value chain assessments required only where specific risks are identified.

Some demanding requirements remain, aiming to ensure that sustainability disclosures continue to provide reliable and comparable information for stakeholders and capital markets.

Use the Extended Timeline, Don’t Wait it Out

For CSRD, large companies that were previously in the second wave now have a mandatory reporting start date of 2028 instead of 2026. Meanwhile for CSDDD, the application deadline has been moved from 2027 to 2029 to provide companies with ample time to prepare for due diligence requirements.

While these extensions may seem like a relief for companies already preparing for CSRD and CSDDD, they should be seen as making the required disclosures more doable, rather than a reason to slow down. Building the necessary data systems, governance processes, and cross-functional coordination for ESRS-aligned disclosure and human rights due diligence is a multi-year effort. Companies that pause progress risk falling behind peers that continue to prepare.

Read the Fine Print Before Assuming Relief

Recent changes to the simplified disclosure rules have removed certain requirements, such as submitting a climate transition plan for CSDDD and the EU-wide civil liability regime. However, companies still need to focus on several important details that affect compliance:

• Exemptions: Early CSRD reporters that now fall outside the revised scope are not automatically exempt from reporting in 2026 and 2027. Whether an exemption applies will depend on how each Member State implements the rules, and this will differ across the EU.
• Value chains: For CSDDD, some value chain due diligence remains important. The revised rules do require full human rights due diligence for indirect business partners, but only when there is plausible evidence of adverse impact, rather than on a systematic basis. Companies will need systems in place to identify when this trigger applies, which changes the compliance approach but does not necessarily make it simpler.

Keep the Bigger Picture in View

CSRD and CSDDD were created in response to business demands. Investors were asking for standardized sustainability data, customers built new requirements into their procurement processes, and climate risks were posing very real financial impacts. These realities have only grown. Companies that have invested in CSRD readiness will be served well by that work.

Simplified regulation has made the rules easier to interpret, placing the focus on the substance of reporters’ responses. The key questions now are whether the organization is prepared to meet the rules, how it uses the revised process to demonstrate commitment to climate action and other sustainability issues, and how prepared it is for environmental and social challenges ahead.

G&A Institute’s new issue brief, “The Long Road to Finalization: What the CSRD and CSDDD Revisions Mean for Your Company,” compares the original and revised requirements across scope, timelines, assurance, EU Taxonomy, and CSDDD due diligence obligations.

Download the brief here.

For support assessing your organization’s CSRD and ESRS readiness, reach out to G&A’s team of sustainability and climate analysts.

ABOUT CHRISTINA CARLTON
Senior Sustainability & Climate Analyst, G&A Institute

Christina Carlton is a Senior Sustainability & Climate Analyst at Governance & Accountability Institute. She supports both sustainability and climate engagements, and her work bridges sustainability planning and reporting with targeted climate initiatives, helping companies enhance their ESG performance and integrate resilience into their overall sustainability frameworks.