CSRD – what is it and who does the sustainability reporting directive apply to in 2026?

The CSRD Directive, or the EU Corporate Sustainability Reporting Directive, is a regulation that has fundamentally changed the business landscape. Although the original scope was very broad, a series of amendments in 2025–2026 has made this process a challenge not only operationally but also legally for many companies.

As of April 2026, this topic is no longer merely theoretical – the provisions have entered into force, but recent changes to the reporting thresholds and the so-called “stop-the-clock” directive have significantly shifted the timeline.

In this article we explain how these regulations affect business, what ESRS standards are, and why reliable sustainability reporting remains a priority for management boards despite the changing thresholds.

What is CSRD and what does it mean for companies in Poland?

CSRD stands for Corporate Sustainability Reporting Directive. It is a landmark piece of legislation that replaced the previous NFRD (Non-Financial Reporting Directive). The legislator’s main objective is to ensure that every investor or bank has access to comparable data on a company’s impact on the environment and society.

In Poland, the legal situation regarding non-financial reporting has been subject to rapid change in recent months. Although the original transposition of the CSRD took place through the Act of 6 December 2024, subsequent modifications resulted from the adoption at EU level of the Omnibus I simplification package.

A key moment was the publication on 13 March 2026 of the Act of 27 February 2026 amending the Accounting Act, which transposes into Polish law the option of exemption from ESG reporting for 2025 and 2026. This Act implements EU Directive 2026/470 and introduces a significant relaxation of reporting obligations through a substantial raising of thresholds. From 2027, reporting will apply only to the largest companies employing more than 1,000 employees and achieving very high revenues.

In practice, this means that many companies that prepared an ESG report for 2024 may lawfully refrain from reporting for 2025 and 2026, provided they do not meet the new criteria. This decision is voluntary and rests with the company’s management board.

CSRD versus NFRD – how the approach to data is changing

CSRD significantly raises the quality and verification requirements for non-financial data. Even with the reduced number of entities in scope in 2026, the standard remains uncompromising.

The key pillars of change are:

• Precision: The reporting process under CSRD can no longer be based on self-selected indicators – ESRS standards are mandatory.
• Digitalisation: Reports must be prepared in XHTML format.
• Verification: Reporting must be confirmed by a statutory auditor (assurance). As a result, an ESG report carries the same weight as annual financial reporting.

Who is subject to the obligation in 2026? (Current schedule)

This is the key question for every manager this year. As a result of the European Parliament’s decision in December 2025, the reporting obligation has been drastically limited to the largest entities.

The position as of April 2026 is as follows:

• New main threshold: Under the latest changes, the ESG reporting obligation now applies only to entities meeting two conditions: more than 1,000 employees and net revenues above EUR 450 million.
• Wave I (reporting for 2024): The largest public-interest entities (under the old thresholds) submitted reports in 2025. Under the new Act published on 13 March 2026, if these entities do not meet the new thresholds, they may voluntarily take advantage of the exemption from ESG reporting for 2025 and 2026.
• Waves II and III – deferral (“stop-the-clock”): Other large entities and listed SMEs have been given more time. Their deadlines are now 2028 (for 2027) and 2029 (for 2028) respectively.

Under the rules in force since March 2026, companies employing fewer than 1,000 employees are no longer in a state of regulatory uncertainty. Under the new thresholds they are not within the target scope of the CSRD and may lawfully refrain from ESG reporting for 2025 and 2026, provided that an informed decision to this effect is taken by the management board.

It is worth noting, however, that March 2026 was for many organisations the month in which reports were published – reports prepared under conditions of prolonged regulatory uncertainty. Some companies, despite the opening of a path to exemption, chose to publish a report for 2025, driven by, among other things, the need for reporting continuity, the expectations of stakeholders, banks and business partners, or a desire to consolidate the maturity of ESG processes within the organisation.

What specifically must be disclosed? ESG areas and standards

To meet the rigorous requirements of CSRD, an organisation must prepare a report based on the European Sustainability Reporting Standards (ESRS). It covers three main areas:

• Environmental (E): Climate change, pollution, water, biodiversity and ecosystems, and circular economy.
• Social (S): The situation of own employees and those throughout the value chain, affected communities, consumers and end users.
• Governance (G): Business conduct, including business ethics and management transparency.

Double materiality – the heart of the process

The foundation is the double materiality assessment. Every entity must assess reality from two perspectives: the company’s impact on its surroundings, and financial considerations (how ESG risks and opportunities affect the company’s financial results). Only material issues are included in the report, and this process must be thoroughly documented for the auditor.

How to prepare your company for CSRD – a practical guide for 2026

Implementing the directive’s requirements calls for a systematic approach:

1. Gap analysis: Assessment of ESG data availability and the degree to which policies and procedures have been implemented.
2. Legislative monitoring: Tracking work on simplified ESRS standards and observing what final solutions are adopted in the legislative process.
3. Data management: Organising information on what ESG data is already available within the organisation, where it is held and who is responsible for it, so that the company can prepare efficiently for reporting.
4. Cooperation with the auditor: Preparing processes for verification by a statutory auditor.

CSRD and the value chain – indirect obligations for smaller companies

Despite the raising of the threshold to 1,000 employees, the CSRD indirectly affects many more companies. The largest players collect data from their entire supply chain (upstream and downstream). In March 2026, smaller businesses are receiving large volumes of enquiries about carbon footprints and labour standards. Companies that are able to respond to these are building a significant competitive advantage.

Summary: ESG in Poland after the 2026 changes

The Corporate Sustainability Reporting Directive has evolved towards simplification and reducing the burden on smaller businesses. 2026 is a year of scrutiny for the largest entities (above 1,000 employees) and a time of strategic calm for the rest of the market. It is worth bearing in mind, however, that ESRS standards are becoming the universal language of European business.

FAQ – Questions about the new regulations

What is the “stop-the-clock” directive?

This is a 2025 regulation that deferred reporting deadlines for medium-sized and smaller entities by two years.

Is the 250-employee threshold still applicable under CSRD?

Following the December 2025 changes, the threshold was raised to 1,000 employees, which significantly narrowed the group of companies subject to the direct reporting obligation.

Does an ESG report need to be verified by an auditor?

Yes – regardless of the size of the company, if it falls within the scope of CSRD, its report must undergo an assurance process conducted by a statutory auditor.

Sources:

• Directive (EU) 2022/2464 (CSRD).
• “Stop-the-clock” Directive (EU) 2025/794.
• Draft Act UC136 (introducing the 1,000-employee and EUR 450 million revenue thresholds).
• Act of 27 February 2026 amending the Accounting Act.