In short
- The Taxonomy has no scope of its own. Article 8 points at CSRD, so when CSRD's scope moved, the Taxonomy's moved with it.
- CSRD asks for emissions in tonnes. The Taxonomy asks for three financial ratios, and for buildings it tests kilowatt-hours.
- Most companies are now outside both and still get asked, because their lender or their customer is inside one.
These are two different duties that share a single trigger, and that is the part almost every guide gets wrong. The EU Taxonomy has no scope of its own: Article 8 binds whoever already has to report under Articles 19a or 29a of the Accounting Directive, which is CSRD's test. So when Directive (EU) 2026/470 narrowed CSRD on 24 February 2026 to undertakings above both EUR 450 million turnover and 1,000 employees, the Taxonomy narrowed with it, silently and on the same day.
That single sentence resolves most of the confusion. What follows is what each one actually asks for once you are inside it, and what to do if you are outside both and the questions arrive anyway.
What is the actual difference between them?
They ask for different things in different units, and they are answered by different people in your business.
- : What it is
CSRD: A reporting duty, delivered through the ESRS
EU Taxonomy: A classification system plus an Article 8 disclosure duty - : What it asks for
CSRD: Sustainability information, including a greenhouse gas inventory
EU Taxonomy: The share of turnover, capital expenditure and operating expenditure that is taxonomy aligned - : The unit
CSRD: Tonnes of CO2 equivalent
EU Taxonomy: Three percentages, taken from your financial statements - : Who answers it
CSRD: Sustainability, with finance
EU Taxonomy: Finance, with sustainability - : Assurance
CSRD: Limited assurance
EU Taxonomy: Reported inside the same management report
The most useful way to hold the difference: CSRD asks what you emitted, the Taxonomy asks what proportion of your money is doing work the EU classifies as sustainable. A company can have a good emissions number and a poor alignment ratio, and the reverse is equally possible.
Which one applies to me, or do both?
Run one test, because there is only one.
Since Directive (EU) 2026/470, Articles 19a and 29a reach undertakings, and parent undertakings of groups on a consolidated basis, that exceed both a net turnover of EUR 450 million and an average of 1,000 employees during the financial year. Both tests, not either. Fail one and you are out of CSRD, and therefore out of Article 8 Taxonomy reporting too.
Three things follow that are worth stating plainly, because the superseded version of this test is still the version most published guidance carries.
There is no balance sheet limb. If you read a guide describing "two of three criteria" including a balance sheet figure, it is describing the Accounting Directive's separate large-undertaking test, not the CSRD trigger. They are different tests and conflating them is the most common error we have seen, including on pages that were updated in 2026.
The listed-SME wave is gone. Not delayed. Directive (EU) 2026/470 deleted it outright, along with the empowerment for a listed-SME standard.
Sector-specific standards are gone too. The empowerment and its 30 June 2026 deadline were both deleted. Any page telling you to prepare for a sector ESRS is describing something that no longer exists.
When does the narrower scope actually bite?
For financial years beginning on or after 1 January 2027, with national transposition due by 19 March 2027. Because it is a directive, the exact date the narrower scope takes effect in your country depends on transposition, so do not take a national date from any vendor page, including this one.
The companies already reporting were not let off retrospectively. Financial year 2024 was deliberately left alone, and the first wave's window was closed forward instead, running between 1 January 2024 and 31 December 2026. Member States were given an option to relieve sub-threshold companies for financial years 2025 and 2026, which is an option for the Member State rather than an exemption you can claim.
Two delegated acts adopted on 3 July 2026, covering the revised standards and the voluntary standard, were still in scrutiny in late August 2026. Until they are published in the Official Journal they are not law, so treat any article describing their content as a forecast.
What does the Taxonomy ask for that CSRD does not?
Financial ratios, and for real assets an energy test rather than a carbon test. This is the part that surprises people.
If you own buildings, alignment on climate change mitigation under activity 7.7 is tested on an Energy Performance Certificate of class A, or on the building sitting in the top 15 percent of the national or regional stock by operational primary energy demand. For a large non-residential building, with heating or cooling rated above 290 kW, it also has to be efficiently operated through energy performance monitoring. Those are kilowatt-hours and certificate classes. There is no tonnage anywhere in the criterion.
Since 1 January 2026 there is also a materiality relief: you may omit assessing eligibility and alignment for activities below 10 percent of the relevant KPI denominator, with equivalent derogations for financial undertakings.
So if someone tells you the Taxonomy requires you to calculate your carbon footprint, they have it wrong. Your carbon inventory obligation comes from CSRD and the ESRS, or from your counterparties. The Taxonomy question is answered from energy and financial data.
I am outside both. Why am I still being asked?
Because the people inside are obliged to ask you, and this is now the normal case rather than the exception.
Your customer is inside CSRD. They have to report value chain information, and the only way to get it is to ask their suppliers. Nothing obliges you to answer, and losing the account is the enforcement mechanism. What has changed in your favour is that a supplier averaging up to 1,000 employees in a reporter's value chain is a protected undertaking with a statutory right to decline requests beyond the voluntary standard, and a contract clause saying otherwise is not binding. We go through how to use that in what a customer may not ask you.
Your lender is inside the Taxonomy. Banks report a Green Asset Ratio whose templates carry explicit lines for loans collateralised by residential immovable property and for building renovation loans. They cannot complete those lines without evidence from the borrower, which is why property owners with no reporting duty of their own still receive the questionnaire.
You want to be inside voluntarily. VSME is the standard designed for this, and it is what the value chain cap is measured against. It is an EFRAG standard rather than a Commission one, and its current EU-law standing is a non-binding Commission Recommendation. We cover it in the VSME standard.
Does satisfying one satisfy the other?
No, and the question is worth taking seriously because they overlap enough to look interchangeable.
They run off the same underlying records. The same meter readings, the same entity boundary, the same landlord and tenant split feed both. But the outputs are not substitutes: an emissions inventory does not produce an alignment ratio, and an alignment ratio says nothing about your emissions. If you are in scope of CSRD you are in scope of Article 8 as well, and you produce both.
The practical consequence is about sequencing rather than choosing. Get the boundary and the data collection right once, then produce two different reports from it. Rebuilding the underlying data twice is the expensive mistake.
What should you do first?
Run the scope test on your own numbers. It takes a minute and it is the input to every other decision: turnover above EUR 450 million and headcount above 1,000, both, on a consolidated basis if you are a parent.
If you are out, your work is not compliance, it is answering customers and lenders well and refusing what sits beyond the cap. If you are in, the emissions inventory has the longest lead time of anything in the ESRS, so it starts first.
Either way you can build a first inventory on a free account without a sales call, and see what your data actually supports. The platform names CSRD among supported legislation and covers over 20,000 spend-based and activity-based factors, with entity management across locations and sites.
One limit worth stating before you rely on it for CSRD specifically. A mid-market customer rated us 3.5 out of 5 on G2 in June 2026 and said that if you are looking for a broader ESG data and reporting platform, for example for CSRD, this one is less complete, with no data source management feature and no decarbonisation target monitoring. We cover the emissions calculation well. The full ESRS report is a wider job, and that is what CSRD consulting is for.
Sources: Directive (EU) 2026/470 of 24 February 2026, Regulation (EU) 2020/852 Article 8, Delegated Regulation (EU) 2021/2139 activity 7.7, Delegated Regulation (EU) 2026/73, Directive (EU) 2022/2464, all read against the Official Journal text. Verified 28 August 2026. Because 2026/470 is a directive, national transposition determines the exact date the narrower scope applies in your country.
Facts on this page were last verified on 2026-08-28.
