ESG & carbon reporting in European Union
The EU has the world’s most comprehensive sustainability reporting regime. Large companies report under the CSRD using the European Sustainability Reporting Standards (ESRS) on a double-materiality basis, though the 2025–2026 Omnibus reform narrowed the scope to larger companies. SMEs use the voluntary VSME standard to meet value-chain requests.
Key regulations
Mandatory reporting for large companies against the ESRS; scope narrowed by the Omnibus to broadly companies over 1,000 employees and €450m turnover, applying from financial years starting 1 January 2027.
EFRAG’s voluntary standard for SMEs, recommended by the European Commission, for proportionate reporting and answering value-chain requests.
A classification of environmentally sustainable economic activities that in-scope companies report against alongside the CSRD.
Who must report
Large EU (and large non-EU) companies above the post-Omnibus thresholds. SMEs are largely out of mandatory scope and use VSME voluntarily to answer customer and bank requests.
Relevant frameworks
- CSRD — Corporate Sustainability Reporting Directive
- VSME — Voluntary Sustainability Reporting Standard for SMEs
- GHG Protocol — Greenhouse Gas Protocol Corporate Standard
Frequently asked questions
Who must report under the CSRD in the EU?
After the Omnibus reform, mainly large companies above roughly 1,000 employees and €450m turnover, from financial years beginning on or after 1 January 2027. Companies already reporting under the former NFRD continue meanwhile.
Do EU SMEs have to report?
Mostly not after the Omnibus, which removed listed SMEs from mandatory scope. SMEs use the voluntary VSME standard to answer value-chain ESG requests.