In short
- Carbon reporting is mandatory for a few thousand of the largest EU undertakings and voluntary for everyone else.
- The obliged population got smaller in February 2026, not bigger, which is the opposite of what most coverage says.
- The voluntary standard now sets a statutory ceiling, so voluntary does not mean without legal effect.
The claim that carbon reporting is now mandatory is half true, and the half that is false is the half most companies act on. In the EU it is mandatory for undertakings that exceed both EUR 450 million of net turnover and an average of 1,000 employees, from financial years starting on or after 1 January 2027. That population got smaller in February 2026, not bigger. For everyone else reporting is voluntary in law and close to compulsory in commerce, which is a different problem with a different answer.
The confusion is understandable. Two things moved in opposite directions at once: the legal duty narrowed sharply, and the number of companies being asked for numbers kept rising.
Is carbon reporting mandatory or not?
For a small population, yes, and the test is precise.
Since Directive (EU) 2026/470 of 24 February 2026, Article 19a(1) of Directive 2013/34/EU reaches undertakings that exceed, on their balance sheet dates, a net turnover of EUR 450 000 000 and an average of 1 000 employees during the financial year. Article 29a(1) says the same for parent undertakings of a group on a consolidated basis. The conjunction is and, not or. Both tests must be exceeded.
For those undertakings the reporting really is a greenhouse gas accounting duty. ESRS E1-6 requires gross scope 1, gross scope 2 and gross scope 3 in metric tonnes of CO2 equivalent plus a total, with scope 2 disclosed twice, once location-based and once market-based, and the total presented on both bases. It carries a limited assurance opinion.
For everyone else there is no legal duty to hold a carbon footprint at all. Recital 7 of the amending directive describes the target population as the largest undertakings, groups and issuers, and everyone below is explicitly invited to report voluntarily instead.
Which of these is actually a legal obligation?
The instruments people cite at each other are not the same kind of thing, and only some of them ask for a carbon number.
| Instrument | Legally binding? | Does it require a carbon number? | What makes it bite |
|---|---|---|---|
| CSRD and the ESRS | Yes, through national law | Yes, a full inventory with limited assurance | Statutory duty above both thresholds |
| EU Taxonomy, Article 8 | Yes, on the same population | No. Three financial ratios | It borrows CSRD's scope, so it moves when CSRD moves |
| Dutch WPM mobility reporting | Yes, Dutch law | No. Kilometres by mode and fuel, converted by the ministry | Employer headcount, assessed per KvK number |
| CO2-Prestatieladder | No. A private scheme owned by SKAO | Yes, an audited organisational inventory | A fictitious discount on your bid sum |
| EcoVadis | No. A paid commercial rating | No, but coverage rules bite hard if you claim one | A customer invitation you can refuse |
| The voluntary standard for SMEs | No. Currently a Commission Recommendation | It contains a greenhouse gas disclosure | It sets the ceiling on what customers may demand |
Two rows in that table do more work than they look like they should. The CO2-Prestatieladder is not law and never has been, and it is nevertheless the sharpest reason in the Dutch market to hold an audited inventory, because the tier is worth a percentage of the bid sum. WPM is law, it is dated, and it produces no tonnage at all.
Why did the mandatory population shrink in 2026?
Because the scope was cut twice in eighteen months and almost nothing published before late February 2026 describes the current version.
Directive (EU) 2025/794 moved the dates, postponing the second and third waves by two years. Directive (EU) 2026/470 then replaced the thresholds outright, deleted the listed-SME wave along with the empowerment for a separate listed-SME standard, and closed the first wave's window forward by rewriting it to run between 1 January 2024 and 31 December 2026.
So if a page tells you the trigger is 250 employees, or 500 employees, or a two-of-three test including a balance sheet figure, it is describing a repealed version. The two-of-three structure belongs to the separate large-undertaking definition in the Accounting Directive, not to the CSRD trigger. That error was live on our own guide until August 2026, which is why we say it plainly.
How did a voluntary standard end up doing legal work?
This is the genuinely new part, and it inverts the usual relationship between binding and non-binding instruments.
Directive (EU) 2026/470 gave undertakings in a reporter's value chain that do not exceed an average of 1,000 employees a statutory right to decline information exceeding the voluntary standard, where the request is made for the purpose of sustainability reporting under the Accounting Directive. It also made any contractual provision to the contrary non-binding.
Read that carefully. The voluntary standard is not just a template you may use if you like. It is the measuring stick for a statutory ceiling on what a large customer may require from a smaller supplier. A non-binding document is now the reference point for a binding prohibition.
Two honest qualifications, because the excitement around this outruns the text. The ceiling applies only to reporting requests, so it leaves due diligence, risk management and ordinary commercial questions untouched. And the delegated act that fixes the standard's content, C(2026) 5011, was adopted on 3 July 2026 and was still in Parliament and Council scrutiny on 28 August 2026, with its operative article written to apply from financial years beginning on or after 1 January 2027. The architecture is settled. The exact height of the ceiling is not yet law. We track it in the VSME standard.
Which voluntary schemes hit harder than the mandatory ones?
The ones attached to money.
A CO2-Prestatieladder tier is worth an award advantage on a bid, and SKAO's own figure is that the ladder has been used in more than 5,000 tenders and by more than 300 contracting authorities. Nobody is obliged to certify. Contractors do it because the alternative is losing work.
An EcoVadis assessment is a paid subscription, always solicited, and a company can always refuse it. Suppliers complete it because a customer asked. Its coverage rule is stricter than most people expect: greenhouse gas and energy data must cover 95 percent of the assessed scope to be credited at all, against 80 percent for other reporting, which makes a rough complete footprint worth more than a tidy partial one. Read on 28 August 2026 from the published methodology disclosures.
Neither is restrained by the value chain cap, because neither is a request made for the customer's own sustainability reporting.
What should you do differently as a result?
Stop asking whether you have to, and start asking who is asking.
If you are above both thresholds, your work is compliance, the inventory needs to survive a limited assurance opinion, and it has the longest lead time in the whole ESRS. CSRD consulting is the route.
If you are below them and under 1,000 employees, your work is commercial. Build one inventory good enough to hand to every customer, aim it at the voluntary standard rather than full ESRS, and use the ceiling when a questionnaire runs past it. We cover how in which ESG questions you can refuse.
If you are below the thresholds but over 1,000 employees, you have no duty and no ceiling, which is the least comfortable square on the board. A good inventory and a firm commercial line is the whole strategy.
In all three cases the calculation underneath is the same, and you can start it on a free account with no sales call. The platform serves 5,000+ users and covers more than 20,000 spend-based and activity-based factors.
One limit worth knowing first. A Small Business reviewer on G2 said in August 2026 that there is no forecasting, and that we had told them it is on the development list. If your board wants scenario projections rather than a measured footprint, that is not what this does today.
Sources: Directive (EU) 2026/470, Directive (EU) 2025/794, Directive (EU) 2022/2464, Directive 2013/34/EU, Delegated Regulation (EU) 2023/2772, Regulation (EU) 2020/852 Article 8, Besluit CO2-reductie werkgebonden personenmobiliteit, SKAO scheme documents, EcoVadis methodology disclosures. Verified 28 August 2026.
Facts on this page were last verified on 2026-09-17.
