Does CSRD apply to your company? A one minute test

In short

• The test is two numbers joined by AND: net turnover above EUR 450 million and an average of 1,000 employees. Miss either and you are out.
• There is no balance sheet criterion in the CSRD scope test, and it is not a two of three test.
• Being out of scope removes the filing duty, not the questionnaires. That is a different problem with a different answer.

Take your net turnover and your average headcount for the financial year. If net turnover exceeds EUR 450,000,000 and the average number of employees exceeds 1,000, CSRD reaches you, for financial years beginning on or after 1 January 2027. If either number falls below its line, it does not. That is the whole test. There is no third criterion, no balance sheet limb, and no version of it where exceeding one number is enough. If you are in, your emissions inventory is the long pole. If you are out, you still have customers who are in.

What is the exact test?

Directive (EU) 2026/470 of 24 February 2026 replaced the text of Articles 19a(1) and 29a(1) of the Accounting Directive, 2013/34/EU. Those two articles are where the duty actually lives, which is why searching for "the CSRD" as a standalone rulebook never works.

The enacted wording reaches undertakings which, on their balance sheet dates, exceed a net turnover of EUR 450 000 000 and an average number of 1 000 employees during the financial year. Article 19a covers the individual undertaking. Article 29a says the same thing for a parent undertaking of a group, measured on a consolidated basis.

The conjunction is the entire story. Recital 7 of the same directive uses the identical construction, describing a net turnover exceeding EUR 450 000 000 and an average of more than 1 000 employees. Both, not either.

What does that look like on real numbers?

Five worked cases, because the abstraction is what people get wrong.

The fourth row is the one that catches finance teams. A big balance sheet is irrelevant here. If you are reading a guide that describes CSRD scope as "two of three criteria" with a balance sheet figure in it, that guide is describing the Accounting Directive's separate large undertaking definition in Article 3(4), which is a different test used for a different purpose. Conflating the two is the most common error in published CSRD guidance, and it was live on our own guide until August 2026.

Are there routes into scope that are not the two numbers?

One, and it applies to groups headquartered outside the Union.

Article 40a catches a third-country undertaking whose group generated net turnover in the Union above EUR 450 000 000 in each of the last two consecutive financial years, where the EU subsidiary or branch that has to publish exceeds EUR 200 000 000 of net turnover in its own right. Those thresholds were raised by Directive (EU) 2026/470, from EUR 150 000 000 at group level. The regime applies for financial years starting on or after 1 January 2028.

If you run the European arm of a non-EU parent, that is your test, and it starts a year later than everyone else's.

From when, exactly?

For financial years beginning on or after 1 January 2027. Member States have until 19 March 2027 to transpose Directive (EU) 2026/470 into national law.

Two qualifications matter if you are planning around a date. CSRD is a directive, so nothing in it binds your company directly. It binds your Member State to legislate, and the date your obligation actually starts is set by that national act. Do not take a national date from any vendor page, this one included.

Second, if you already reported under the first wave, you were not let off. Companies that were large public interest entities above 500 employees stayed in for financial years 2024, 2025 and 2026. The window was closed forward rather than reopened: Article 5(2)(a) now runs 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 a choice for the Member State, not an exemption you claim for yourself. Whether it was exercised where you file is a question for your national law.

You are in scope. What actually starts now?

The greenhouse gas inventory, because it has the longest lead time of anything in the sustainability statement.

Disclosure Requirement E1-6 of the European Sustainability Reporting Standards asks for gross scope 1, gross scope 2, gross scope 3 and total emissions in tonnes of CO2 equivalent. Scope 2 has to be reported twice, once location based and once market based, and the total is presented on both bases. Scope 3 covers each significant category rather than all fifteen automatically. There is also an intensity figure, total emissions per net revenue, with the denominator reconciled to a line item or note in your financial statements.

Before any of that, settle your boundary. The sustainability statement covers the same reporting undertaking as your financial statements, and then for greenhouse gases specifically, associates, joint ventures and jointly controlled operations come in at 100 percent of the emissions of anything you operationally control, not at your equity share. That is two boundaries running side by side in one report, and reconciling them late is what breaks timelines.

The statement carries a limited assurance opinion. Not reasonable assurance: that step was removed from the text in February 2026. Harmonised limited assurance standards are not due until 1 July 2027, so your provider is currently working to national standards and will ask how each number was produced.

If the scope 3 selection is the part you cannot defend, that is what scope 3 consulting exists for, and assembling the full statement around the emissions half is CSRD consulting work.

You are out of scope. What changes and what does not?

Your filing duty disappears. Your inbox does not.

Companies still inside CSRD have to report value chain information, and the standards tell them to estimate with sector averages where they cannot collect. Most would rather ask you. So the questionnaire survives the narrowing of the regulation that produced it.

What you gained in February 2026 is a ceiling. If you do not exceed an average of 1,000 employees and you sit in a reporter's value chain, you are a protected undertaking with a statutory right to decline requests that go beyond the voluntary reporting standard, and a contract clause saying otherwise is not binding. The reporter also has to tell you which parts of a request exceed the cap. The limits are real though: it bites only on requests made for CSRD reporting, so due diligence, procurement and rating questionnaires are untouched. We work through where the line falls in what a customer may not ask you.

The standard to aim at instead is the voluntary one for SMEs, covered in the VSME standard. Note what it currently is in EU law: an EFRAG standard carried by a non-binding Commission Recommendation, with self-declaration and no assurance obligation.

Where does Hedgehog fit, and where does it stop?

On the emissions half, on either side of the line. The platform names CSRD among the legislation it supports, covers over 20,000 spend based and activity based factors, handles entities across locations and sites, and has 5,000+ users. A free account gets you a first inventory without a sales call.

Now the limit, stated before you rely on it. A Mid-Market reviewer rated us 3.5 out of 5 on G2 in June 2026 and wrote 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. That review is about exactly this use case. We do the greenhouse gas accounting well; the rest of the sustainability statement is a wider job.

Whichever side of the threshold you land on, run the test on your own numbers first. It takes a minute and it changes what you should be doing for the next two years.

Sources: Directive (EU) 2026/470 of 24 February 2026, Directive (EU) 2025/794, Directive (EU) 2022/2464, Directive 2013/34/EU Articles 19a, 29a and 40a, Delegated Regulation (EU) 2023/2772, all read against the Official Journal text. Verified 28 August 2026. Because 2026/470 is a directive, national transposition determines the exact date the narrowed scope applies in your country.

Facts on this page were last verified on 2026-09-17.