The European Commission (EC) has built smart flexibility into the Corporate Sustainability Reporting Directive (CSRD), giving companies a thoughtful runway to develop their sustainability reporting capabilities over time. This flexibility comes in the form of phase-in provisions — specific data points and disclosures that companies can choose to delay reporting on for one to three years from the start of their CSRD reporting obligations.

Understanding which data points are subject to these optional delays is critical for prioritizing your CSRD roadmap and allocating your team's resources effectively.

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What are CSRD phase-in provisions?

Phase-in provisions are temporary exemptions that allow companies to delay reporting on specific data points within the European Sustainability Reporting Standards (ESRS) for a defined period after their first year of CSRD reporting. They are designed to acknowledge that some data is harder to collect than others and that companies need time to build the necessary processes and systems.

These provisions apply to data points that are:

• Particularly challenging to collect in the short term
• Dependent on supply chain or value chain data that is not yet available
• Requiring significant methodological development or system investment

What changed with the Omnibus I Directive

The Corporate Sustainability Reporting Directive (CSRD) originally came with an ambitious set of reporting requirements across 12 topical ESRS standards and over 1,000 data points. Following the Omnibus I Directive, adopted in February 2026, this picture has changed substantially:

• Mandatory data points have been cut by roughly 70%, from over 1,000 to approximately 320
• Sector-specific ESRS standards have been scrapped entirely
• The employee threshold has been raised from 250 to 1,000+ employees and €450M+ turnover
• Many previously conditional data points are now explicitly optional

This simplification has changed the practical relevance of phase-in provisions. With fewer mandatory data points, companies now have more clarity about what they must report versus what is genuinely voluntary.

Key categories of phase-in data points

Under the ESRS framework, the following categories of data points remain subject to phase-in provisions for companies that still fall within the updated CSRD scope:

1. Value chain data (3-year phase-in)

Companies may delay reporting on data sourced from their upstream or downstream value chain for up to three years from their first CSRD reporting year. This applies to specific data points in ESRS E1, E2, E3, E4, S2, and S3 that explicitly require data from suppliers, customers, or other value chain actors. This is one of the most significant phase-ins given how difficult Scope 3 and supply chain data collection remains for most companies.

2. Financial impact quantification for climate (1-year phase-in)

Under ESRS E1, companies may delay for one year the disclosure of quantified financial effects of climate-related risks and opportunities on their financial position, financial performance, and cash flows. This applies specifically to the forward-looking financial impacts rather than the risk identification itself.

3. Social and biodiversity data points (1-2 year phase-in for smaller companies)

Companies with fewer than 750 employees may apply phase-in provisions to specific data points in ESRS S1 (own workforce) and ESRS E4 (biodiversity) for one to two years depending on the specific disclosure. This recognizes that smaller reporters in scope need additional time to build HR and environmental data infrastructure.

How phase-in provisions work in practice

To use a phase-in provision, your company must:

1. Identify that the data point in question is eligible for phase-in in the ESRS standard
2. Explicitly disclose in your sustainability statement that you are using the phase-in
3. State when you will begin reporting on the phased-in data points
4. Ensure the phase-in is reflected in your double materiality assessment and your overall ESRS reporting plan

You cannot simply omit data points without explanation. Disclosure of the fact that you are using a phase-in provision — and for how long — is itself a requirement.

Which ESRS standards are most affected?

The phase-in provisions are most relevant for:

• ESRS E1 (Climate change) — value chain emissions and financial impact quantification
• ESRS E4 (Biodiversity) — site-level data and biodiversity impact metrics
• ESRS S1 (Own workforce) — certain workforce composition and remuneration data points for smaller companies
• ESRS S2 (Workers in the value chain) — almost entirely dependent on value chain data, making the phase-in broadly applicable
• ESRS S3 (Affected communities) — same as S2, highly dependent on value chain information

How to use phase-in provisions strategically

Rather than treating phase-ins as a way to avoid reporting, forward-thinking companies use them as a structured runway to build data collection capabilities. The best approach:

1. Be explicit in your reporting: Disclose which phase-ins you are using and your plan to close the gap
2. Prioritize value chain engagement early: Supplier data collection is the hardest part. Start building relationships and data request processes now, even if you're not yet required to report the results
3. Use the phase-in period to build systems: Invest in the data infrastructure and supplier engagement tools that will make phase-in elimination possible
4. Review annually: As your capabilities improve, move away from phase-ins ahead of schedule where possible. This demonstrates maturity and reduces last-minute pressure

The relationship between phase-ins and your double materiality assessment

Your DMA determines which ESRS standards are material for your business. Phase-in provisions only apply to data points within standards that are material — there is no need to consider phase-ins for topics that are not material and therefore not reported.

This means the DMA and the phase-in decision are closely linked. A company that has identified climate change as material must decide which E1 data points it will report from year one versus phase in. These decisions should be documented and defensible.

Practical next steps

To operationalize CSRD phase-in provisions effectively:

• Complete your double materiality assessment to clarify scope
• Map each material data point to its phase-in eligibility in the ESRS standard
• Document your phase-in decisions with rationale
• Build a roadmap for closing phase-in gaps in year two and three
• Align with your auditor on phase-in disclosures ahead of limited assurance

For the latest changes to ESRS data points and mandatory requirements, see our article on the amended ESRS under Omnibus. For guidance on navigating VSME reporting for companies that fall out of scope, see navigating the VSME. For a high-level view of how the CSRD timeline has shifted for Wave 2 and 3 companies, see CSRD after Omnibus.

For context on why customers increasingly expect you to report Scope 3 data even if you're not directly in CSRD scope, see why your biggest customers now expect Scope 3 reporting. For the updated Omnibus timeline, see CSRD under Omnibus: updated scope and timelines and the June 2025 ESRS update.