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.

CSRD phase-in provisions give companies breathing room to develop their sustainability reporting capabilities. These provisions allow companies to gradually implement new reporting requirements instead of trying to do everything at once.

The EC recognizes that building comprehensive sustainability tracking takes time, resources, and strategic planning. Companies can delay reporting on complex areas like their value chain, emissions tracking, and ecosystem impact assessments. 

This phased-in approach allows businesses to build their sustainability muscles incrementally, developing expertise and systems without getting overwhelmed.

Since the original CSRD was adopted, the regulatory landscape has shifted significantly. The Omnibus I Directive (2026/470), published in the Official Journal on 26 February 2026 and entering into force on 18 March 2026, has fundamentally reshaped who reports, when, and how much. The number of mandatory data points has been reduced from over 1,000 to around 320, and the scope has narrowed to companies with 1,000+ employees and over €450 million in net turnover.

In this article, we will dive into which reporting requirements can be postponed and how to use this extra time strategically. By focusing on key data points today, whilst preparing to expand sustainability data collection capabilities for tomorrow, companies can set themselves up for success in the future. 

CSRD phase-in provisions: A quick recap

The CSRD is the EC's strategic framework for making sustainability reporting a core business practice in the European Union (EU). For companies, this means creating a clear picture of their impacts on, and the risks and opportunities that come from, society and the environment. Different types of companies will experience different implementation timelines, creating a flexible approach to sustainability transparency.

However, the Omnibus I Directive has significantly altered these timelines and thresholds. Below is the current state of play as of March 2026.

Large and public-interest companies (Wave 1)

Starting in 2024, companies already subject to the Non-Financial Reporting Directive (NFRD), representing around 11,700 large companies, began reporting under the new CSRD framework. These companies include businesses with over 500 employees and key public-interest entities such as listed companies, banks, and insurance providers. 

Under the Omnibus I Directive, Wave 1 companies that now fall below the new thresholds (1,000+ employees and €450M+ net turnover) receive a transition exemption for the 2025 and 2026 financial years. Member States may choose to exempt these companies from reporting during this period.

Other large companies (Wave 2) 

The original CSRD rollout planned for additional large companies to begin reporting in 2025. However, the Stop-the-Clock Directive (adopted April 2025) postponed Wave 2 reporting by two years. These companies will now report in 2028, covering financial year 2027.

More importantly, the Omnibus I Directive has raised the thresholds to 1,000+ employees and €450M+ net turnover. This removes approximately 85% of companies that were originally in scope. Companies that no longer meet these thresholds are no longer required to report under the CSRD.

Listed small and medium-sized companies (Wave 3)

Listed SMEs were originally required to begin reporting sustainability data in 2027. Under the Stop-the-Clock Directive, this has been delayed to 2029, covering financial year 2028. The Omnibus I Directive goes further by effectively removing mandatory CSRD reporting obligations for most SMEs, citing the disproportionate administrative burden on smaller companies.

The EFRAG has published the voluntary VSME standard (finalized in December 2024) as a lighter alternative for SMEs that want to report voluntarily or need to respond to value chain data requests from larger companies.

CSRD data points 

The original CSRD introduced 84 potential disclosure requirements and over 1,000 data points across environmental, social, and governance (ESG) criteria. These data points are like the ridges and furrows on a finger. Together they come together to create a company's ESG unique fingerprint.

Under the amended ESRS (published November 2025), mandatory data points have been reduced by approximately 70% - from over 1,000 to around 320. All previously voluntary data points have been removed. The simplified standards are set to apply from financial year 2027, with optional early adoption for financial year 2026.

Not all companies have to report on all data points. Some disclosures are mandatory, while others only come into play after conducting materiality assessments. The double materiality assessment is unique to the CSRD and aims to reduce the cost of collecting and reporting on unimportant topics.

As the CSRD is aligned with global frameworks like the Global Reporting Initiative (GRI), many companies may already be collecting data for some of these data points.

CSRD data points eligible for optional delay

As you prepare for the CSRD's implementation, understanding which data points you must report on, and when, is essential. 

Because the EC has built in a phased approach, there are some data points which are mandatory, and others which don't require reporting just yet. This gives your organization time to build its sustainability data collection and reporting approach. Below is a list of the data points which are eligible for optional delay.

Note: the amended ESRS (expected to take effect from FY2027) significantly simplifies these requirements. Many data points that were previously subject to phase-in provisions have been removed or made permanently optional. Until the amended standards formally apply, the phase-in provisions below remain relevant for companies currently reporting.

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CSRD data point delays for all companies and organizations 

1. Value chain data disclosure delays 

There is a three-year grace period to help companies ease into value chain disclosures. The CSRD requires companies to disclose the impact of their value chain and that includes reporting on both upstream and downstream activities. This means that companies may have to disclose data from their suppliers, distributors, and customers that impact their operations. 

As you can imagine, this is no small feat. For example, these business partners may not themselves be in scope for CSRD reporting yet and that data may not yet be available. Or the supplier may be situated outside of the EU and may not collect data at all. There are any number of reasons why third-party data may not be accessible and the EC acknowledges this complexity. 

That's why a three-year grace period was introduced and during this time, companies are able to leave out data points relating to their value chain and just be upfront about it by explaining:

• Why they're leaving it out;
• Why they struggled to get it;
• How they plan on getting the data in the future.

The Omnibus I Directive also introduces a "value chain cap": companies with fewer than 1,000 employees in a reporting company's value chain may refuse data requests that go beyond the scope of the VSME voluntary standard. This protects smaller suppliers from excessive information demands.

For more information on this, see ESRS 1-10.2 - Transitional provision related to Chapter 5: Value chain.

2. Presenting comparative information disclosure exemption

In a company's first year of CSRD reporting, they are exempt from disclosing comparative information. That means they don't have to dig up comparative data on quantitative metrics and monetary amounts or narrative disclosures from previous periods, as stated in section 7.1 of ESRS 1. This means they can focus on establishing their baseline without the pressure of historical comparisons. 

For more information on this, see ESRS 1-10.3 - Transitional provision related to section 7.1: Presenting comparative information.

3. Financial impacts from climate change

During the first year of reporting, companies get a pass on disclosing the expected financial impacts of climate change on their business. These impacts could be both risks (like extreme weather events or transitional challenges arising from incoming regulations), as well as opportunities (like market demand for low impact products and services).

In addition to this one-year grace period, the EC has also included a three-year phase in for qualitative reporting. This means that it is possible for companies to only report qualitative disclosures for the first three years, if it is not feasible to prepare quantitative disclosures.

Specifically, this exemption applies to data required by ESRS E1-9. For more information on this exemption, see ESRS 1 Appendix C.

CSRD data point delays for companies with fewer than 750 employees

The EC is also phasing in which data points are required for reporting for smaller companies. They've built in extra phase-in provisions into ESRS 1 that specifically target businesses with fewer than 750 employees. 

Note that under the Omnibus I Directive, the new CSRD scope threshold is 1,000+ employees. This means the sub-750 employee phase-in provisions are primarily relevant for companies that were already reporting under Wave 1 and remain in scope during the transition period.

These transitional provisions recognize that reporting costs hit smaller companies harder, especially those new to sustainability requirements. By giving companies more time to prepare and spread out initial costs, the EC aims to improve overall reporting quality. 

Depending on the specific topic, these companies can postpone some reporting requirements by up to two years. This approach gives smaller businesses the breathing room they need to build solid sustainability tracking systems without being overwhelmed by compliance challenges.

The additional phase-ins focus on the most challenging reporting areas, like biodiversity and social issues, including: 

1. Social protection for employees 

For the first year of reporting, companies are exempt from social protection data (ESRS S1-11). Social protection refers to access to health care, income support in cases of challenging life events such as the loss of a job, sick leave or medical care, giving birth and raising a child, or retiring and in need of a pension. For more detail on the full scope of own workforce disclosures, see ESRS S1 own workforce reporting under the amended ESRS. 

2. Biodiversity and ecosystems

Companies are also allowed to delay reporting on impacts on ecosystems and biodiversity conservation (ESRS E4 biodiversity and ecosystems) efforts for the first two years of implementation.

3. Workers in the value chain

Beyond the social protection for employees mentioned above, all data points that touch on workers in the value chain (ESRS S2), including employee rights, labor standards, and workplace conditions, can be delayed for the first two years.

4. Affected communities

Companies can postpone all disclosure requirements covering ethical business practices, anti-corruption measures, and compliance (ESRS S3 affected communities) for the first two years.

5. Consumers and end-users 

All disclosure requirements relating to product safety, customer satisfaction, and consumer rights (ESRS S4 consumers and end-users) are eligible for a two-year delay.

While companies may omit this data from their sustainability reporting for the grace-period mentioned, they must still include the topic in the scope of the materiality assessment. For more information on these one and two year grace periods for companies with fewer than 750 employees, see ESRS 1 Appendix C.

Sector-specific and SME CSRD data point delays

The CSRD has undergone significant changes regarding sector-specific standards and SME considerations since it was first adopted. Below is an overview of the current state:

1. Sector-specific sustainability reporting standards scrapped

The EC originally planned to publish specific standards for a diverse array of sectors: oil and gas, mining, food, automotive, road transport, energy, agriculture, and textiles, to name a few.

These sector-specific standards were first delayed from June 2024 to June 2026. Under the Omnibus I Directive, sector-specific ESRS have now been formally scrapped. The Commission will not develop or adopt sector-specific reporting standards. Companies report using the cross-sector ESRS only.

2. SMEs: from mandatory reporting to voluntary frameworks

The original CSRD required listed SMEs (companies with between 50-249 employees and €10-50m in net turnover) to begin sustainability reporting in 2026. The Omnibus I Directive has fundamentally changed this:

• Listed SMEs are no longer required to report under the CSRD
• Non-listed SMEs were never directly in scope and remain unaffected
• The VSME voluntary standard (published by EFRAG in December 2024) remains available for SMEs that want to report voluntarily or need to respond to value chain data requests from larger reporting companies

Coolset's VSME module helps companies report under this voluntary framework with ease.

The rationale behind these optional delays

In one publication about EU competitiveness, the EC found that reporting was one of the main burdens for companies in general and for SMEs in particular. These optional delays are rooted in reducing the compliance burden while companies transition into sustainability reporting. 

Another of the EC's goals with disclosure delays and postponements for reporting on specific data points is to enhance the quality of reporting, ensuring that companies can provide accurate and valuable information rather than rushing to meet deadlines with incomplete data.

Thomas Dodd, the European Commission's team leader of sustainability reporting, stated during a committee hearing that the EC "recognizes the challenge of maintaining the high ambition defined in the Corporate Sustainability Reporting Directive ... while not going so fast that we endanger the correct and high-quality implementation of the reporting requirements themselves".

How the Omnibus Directive reshapes CSRD reporting

The Omnibus I Directive (2026/470), formally adopted by the Council on 24 February 2026 and published in the Official Journal on 26 February 2026, has transformed the CSRD landscape. Member States have until 19 March 2027 to transpose the directive into national law. Here are the key changes:

Scope reduction: The CSRD now applies only to companies with 1,000+ employees and €450M+ in net turnover. This removes approximately 85% of companies that were originally in scope.

Timeline shifts: Wave 2 companies (previously due to report in 2026) are now delayed to 2028, covering financial year 2027. Wave 3 companies (listed SMEs, originally due in 2027) are delayed to 2029 - though the Omnibus effectively exempts most of them entirely.

Data point simplification: The amended ESRS reduce mandatory data points from over 1,000 to approximately 320, a 70% cut. All previously voluntary data points have been removed. The European Commission will prepare a Delegated Act formally revising the ESRS, with adoption expected by June 2026.

Value chain cap: Companies with fewer than 1,000 employees in a reporting company's value chain are now protected from data requests that exceed the scope of the VSME voluntary standard.

Sector-specific standards: Formally scrapped. No sector-specific ESRS will be developed.

Assurance level: Only limited assurance is mandated. The previously planned transition to reasonable assurance has been dropped.

EFRAG has since published draft simplified ESRS for consultation. For a full breakdown of what the amended standards mean for your reporting, read our ESRS update analysis.

Practical tips for companies that need to start reporting

At Coolset, we believe that even though there might be data points which don't necessarily require reporting just yet, companies that are prepared to collect this data will benefit in the long run. 

Here are three tips to get started:

1. Use ESRS data point mapping tools

Technology can be an ally in sustainability reporting. Using tools that assist in ESRS data point mapping can streamline your process and allow for easy identification of material data points that require attention over those that can wait.

2. The importance of early preparation

Even if some data points allow for optional delays, early preparation will get you ready for when reporting on these topics becomes mandatory. Starting the groundwork now, especially in terms of data collection, will ensure your business can hit the ground running.

Scope 3 reporting is a prime example of where early action pays off. To understand how this happens, read our article on why your customers expect you to report Scope 3 emissions.

If you haven't yet completed your double materiality assessment, our guide on how to conduct a double materiality assessment for CSRD in 2026 walks you through the process step by step.

3. Choosing the right CSRD reporting software for your business

Selecting appropriate CSRD reporting software can simplify the complexity of compliance. Tools specifically designed for the CSRD will provide guided workflows and templates, making data collection and reporting not only easier but more reliable. Use tools like Coolset to streamline the entire CSRD compliance journey, from conducting double materiality assessments to generating audit-proof reports. When you're ready, our guide on how to get audit-ready for CSRD can help you prepare.

In conclusion

As you prepare your organization for the implementation of the EU's sustainability reporting, understanding CSRD phase-in provisions for specific data points can provide much-needed clarity and minimise the pressures on your business.

The Omnibus I Directive has significantly simplified the reporting landscape, reducing both the number of companies in scope and the volume of required data points. However, for companies that remain in scope, understanding the remaining phase-in provisions and building robust reporting systems early remains a strategic advantage.

By prioritizing foundational disclosures and utilizing tools that support strategic reporting, your company will not only comply with current requirements but will also lay the groundwork for future sustainability success.

Coolset's platform is designed to simplify sustainability reporting, especially for mid-market companies and SMEs, by providing an all-in-one solution for carbon management and CSRD compliance.

Start simplifying your sustainability reporting strategy today by scheduling a strategic consultation with our sustainability team today or try our interactive demo. 

FAQs - CSRD phase-in and reporting timelines

1. When do CSRD reporting requirements begin?

‍CSRD reporting is being phased in gradually. Companies already reporting under the Non-Financial Reporting Directive (NFRD) started in 2024. Under the Omnibus I Directive, only companies with 1,000+ employees and €450M+ net turnover remain in scope. Wave 2 companies will report in 2028 (covering FY2027), while listed SMEs have been effectively exempted.

2. Which companies qualify for delayed reporting?

‍Wave 1 companies that fall below the new Omnibus thresholds receive a transition exemption for the 2025 and 2026 financial years. Companies with fewer than 750 employees that remain in scope can delay reporting on selected environmental and social disclosures by 1-2 years under the original phase-in provisions.

3. Can companies delay reporting on value chain emissions?

‍Yes. All companies have a 3-year grace period to report on value chain-related disclosures. They must explain why data is missing and how they plan to collect it. Additionally, the Omnibus I Directive introduces a "value chain cap" that protects companies with fewer than 1,000 employees from data requests exceeding the VSME voluntary standard scope.

4. How has the Omnibus Directive changed the CSRD?

‍The Omnibus I Directive (2026/470), adopted in February 2026, raises the scope thresholds to 1,000+ employees and €450M+ net turnover, reducing in-scope companies by approximately 85%. Mandatory data points have been cut from over 1,000 to around 320. Sector-specific standards have been scrapped, and listed SMEs are effectively exempted from mandatory reporting.

5. What's the best way to prepare during the phase-in period?

‍Companies should:

• Use ESRS mapping tools to prioritize required disclosures under the simplified standards

• Start collecting value chain and emissions data early, even if grace periods apply

• Choose reporting software that supports CSRD workflows, such as Coolset