Regulations •

CSRD: the EU sustainability reporting directive and how it relates to the DPP

What the CSRD is, which companies still report after the Omnibus reform, how ESRS, double materiality and the timeline work, and how CSRD reporting overlaps with the Digital Product Passport.

Author: myDPP Team

CSRD: the EU sustainability reporting directive and how it relates to the DPP

Key takeaways

CSRD stands for Corporate Sustainability Reporting Directive - the EU directive governing how companies report on sustainability, set out in Directive (EU) 2022/2464. It requires companies to report annually against a single set of European Sustainability Reporting Standards (ESRS) on environmental, social and governance topics - assured, inside the management report, and digitally tagged. Its core is the principle of double materiality: a company reports both what is financially material to it and what impact it has on people and the environment. The Omnibus reform (in force 18 March 2026) sharply narrowed the scope: only companies with more than 1,000 employees and over EUR 450 million net turnover now report - removing roughly 80% of previously covered companies. CSRD is an entity-level reporting obligation, not a product-labelling law, and it does not replace a Digital Product Passport. But both rely on the same product-level environmental data. myDPP does not produce a CSRD report; it stores and communicates the verified product data that both the DPP and the product-related ESRS disclosures need.

If you would first like to understand the basics of the passport itself, we recommend the introductory article Digital Product Passport in 15 minutes: what the DPP is and why the EU is introducing it.

What is the CSRD?

The CSRD (Corporate Sustainability Reporting Directive) is the EU directive that puts corporate sustainability reporting on a single, mandatory footing. Its legal basis is Directive (EU) 2022/2464, in force since 5 January 2023. It replaces the older Non-Financial Reporting Directive (NFRD, 2014/95/EU) and substantially expands the scope, level of detail and number of companies concerned.

The goal: make sustainability information as reliable, comparable and verifiable as financial information. That is why the CSRD requires reporting

  • in the management report (not in a separate voluntary document),
  • against the ESRS as a single standard set,
  • with external assurance (initially limited assurance),
  • and digitally tagged in a machine-readable format.

Who does the CSRD apply to after the Omnibus reform?

The scope of the CSRD is the most fast-moving issue in this file. Originally, the obligation was to cascade in waves down to smaller large companies (from 250 employees, EUR 50 million turnover or EUR 25 million balance sheet) and listed SMEs. The Omnibus reform changed this fundamentally.

The Omnibus I package was adopted by the European Parliament on 16 December 2025, given final approval by the Council on 24 February 2026, published in the Official Journal on 26 February 2026 and entered into force on 18 March 2026. Member states have twelve months to transpose it into national law. Two changes matter most:

  • Much higher thresholds: only companies with more than 1,000 employees and over EUR 450 million net turnover now report - up from the previous mark of 250 employees and EUR 50 million turnover. This removes an estimated 80% of previously covered companies from the direct scope.
  • “Stop the clock”: already in spring 2025, an earlier directive postponed the start of reporting for the later waves by two years. The stricter thresholds apply for financial years beginning on or after 1 January 2027.

Important: the largest first-wave companies, which already reported for financial year 2024, remain in scope. For everyone else: if you do not meet the new thresholds, you are no longer directly required to report - but you often remain indirectly affected as a supplier (see below).

What are ESRS and double materiality?

The ESRS (European Sustainability Reporting Standards) are the substantive core of the CSRD - set out in Delegated Regulation (EU) 2023/2772. They define which data points a company discloses, organised into cross-cutting standards and topical standards:

  • Environment (E1-E5): climate change (E1), pollution (E2), water and marine resources (E3), biodiversity (E4), resource use and circular economy (E5).
  • Social (S1-S4): own workforce, workers in the value chain, affected communities, consumers and end-users.
  • Governance (G1): business conduct.

The organising principle is double materiality (the “double materiality assessment”): a topic must be reported if it is either financially material (it affects the company’s value, cash flow or risks) or impact material (the company has a material impact on people or the environment) - or both. The materiality assessment determines which ESRS data points actually need to be filled in.

For manufacturers, E1 (climate change) and E5 (resource use and circular economy) are especially relevant - and these two standards ask for data that originates at product level.

CSRD and the Digital Product Passport: where they overlap

The CSRD and the Digital Product Passport are two different instruments. The CSRD reports at entity level over a financial year; the DPP describes a single product over its lifecycle. Yet they draw on the same data foundation - because many ESRS disclosures can only be aggregated from product and supply-chain data.

  • E1 (climate change): reporting on greenhouse gas emissions, especially Scope 3 along the value chain, builds on product-level carbon data - the same Product Carbon Footprint (PCF) that can also sit as a field in the DPP.
  • E5 (circular economy): recycled content, material composition, repairability and recyclability are ESRS data points - and at the same time core fields of the DPP under the ESPR.
  • Links to other rules: the same carbon data underpins the CBAM border adjustment and the mandatory footprint declaration in the battery passport, and environmental claims need solid evidence under the EmpCo directive, as our article on the Green Claims Directive shows.

The common denominator is an auditable data foundation per product: material composition, origin, energy, suppliers and the carbon value derived from them. Maintain that foundation once, and it serves the DPP, the product-related ESRS disclosures, CBAM and environmental claims from a single source.

Even outside the scope: the value-chain effect

The Omnibus reform removes many smaller companies from the direct obligation - but that does not make sustainability data irrelevant for them. Large companies still in scope have to obtain data from their suppliers for their value-chain disclosures (such as Scope 3 emissions or material flows). An SME that sits outside the CSRD will still receive these requests.

For such suppliers, the EU provides a voluntary, proportionate standard (VSME) that serves as a template for supplying exactly the data large customers ask for. A company that keeps its product data structured anyway - by material, with origin and a carbon value - delivers this information with far less effort. This is where a DPP-ready product-data foundation pays off twice: for your own passport and for the data requests coming down the supply chain.

What the CSRD is not

An honest framing belongs here, precisely because the CSRD and the DPP are often mentioned in the same breath:

  • The CSRD is an entity-level reporting obligation, not a product-labelling law. It produces no QR code and no consumer-facing product page.
  • A Digital Product Passport does not replace a CSRD report. The report is published in the management report and assured, not through a passport.
  • myDPP does not produce a CSRD report, does not carry out the materiality assessment and does not provide assurance. The report is the responsibility of the company and its auditors; interpreting the ESRS is a task for specialists.

What a Digital Product Passport - and myDPP - does is to store, version and communicate the verified environmental and supply-chain data per product in structured form, so that the same figures are reusable for the DPP and for the product-related parts of ESRS reporting, instead of being captured anew in every system.

Preparing for the CSRD: five steps

1. Check whether you are in scope

Compare your company against the new Omnibus thresholds (1,000 employees and EUR 450 million turnover). Also check whether you are indirectly affected as a supplier to an in-scope customer.

2. Run the materiality assessment

Use double materiality to determine which ESRS topics are relevant to you. For manufacturers, E1 (climate) and E5 (circular economy) are usually front and centre.

3. Identify data gaps

Map the relevant ESRS data points to your existing data sources. Product-level figures - carbon, recycled content, materials - are typically the ones most often missing.

4. Build the product-data foundation

Capture material composition, origin and PCF where they are needed for the DPP anyway - so you avoid maintaining the same data twice for ESRS, DPP, CBAM and Green Claims.

5. Plan for assurance

Prepare for the disclosures to be externally assured. Versioned, traceable product data makes assurance considerably easier.

Frequently asked questions (FAQ)

What is the CSRD in simple terms?

The CSRD is the EU sustainability reporting directive. It requires large companies to report against the single ESRS standards on environmental, social and governance topics - assured disclosures in the management report, following the principle of double materiality.

Who still has to report after the Omnibus reform?

After the Omnibus reform that entered into force on 18 March 2026, only companies with more than 1,000 employees and over EUR 450 million net turnover. This removes roughly 80% of previously covered companies from the direct scope.

When do the new thresholds apply?

The stricter thresholds apply for financial years beginning on or after 1 January 2027. First-wave companies that already reported for 2024 remain in scope.

What is double materiality?

A topic must be reported if it is either financially material (it affects the company’s value) or impact material (the company has a material impact on people or the environment) - or both.

Does the Digital Product Passport replace a CSRD report?

No. The CSRD report is published in the management report and assured. The DPP stores and communicates the underlying product and environmental data that the product-related ESRS disclosures also need, but it does not carry out the reporting itself.

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