ESG reporting in 2026: CSRD obligations, ESRS standards and the accountant's role

Updated April 2026 - ESG reporting (Environmental, Social, Governance) has entered a new phase in 2026. The CSRD (Corporate Sustainability Reporting Directive) — EU Directive 2022/2464 — now requires European companies to publish sustainability information in their annual reports, with the same level of rigour as financial information. This is no longer a voluntary communication exercise: it is a statutory accounting obligation governed by standards and subject to independent verification.

Also see CSRD: who is concerned?, Financial reporting and Advice and audit of public authorities.

These three acronyms are frequently used interchangeably. Yet they cover very different realities.

CSR (Corporate Social Responsibility) is a strategic concept. It refers to the voluntary consideration of social, environmental and economic impacts in business decisions. Any company can pursue a CSR approach regardless of size. It is not standardised.

ESG (Environmental, Social, Governance) is an analytical framework used by investors to assess non-financial risks and opportunities. ESG scores are assigned by rating agencies (Sustainalytics, MSCI, Vigeo Eiris). ESG is primarily an investor language, not a legal obligation in itself.

CSRD is the mandatory regulatory framework requiring covered companies to publish a sustainability report structured according to ESRS standards, integrated into the management report, and subject to verification by an independent third-party body. CSRD transforms what was a voluntary approach into an obligation comparable to financial accounts certification.

The CSRD directive applies progressively. In 2026, obligations cover financial year 2025 for large companies (listed and non-listed large companies) meeting at least two of the three following criteria over two consecutive financial years:

• ▸Net turnover exceeding EUR 40 million
• ▸Total balance sheet exceeding EUR 20 million
• ▸More than 250 employees on average

The Omnibus directive, being finalised at European level in early 2026, plans to raise these thresholds and ease certain obligations for mid-market companies. Listed SMEs on a regulated market were initially covered for financial year 2026; this timetable may be amended. It is therefore essential to verify your company's exact situation at the current date.

For unlisted SMEs below CSRD thresholds, direct statutory obligations do not apply. But they are indirectly concerned through the value chains of their clients or partners subject to CSRD, who must publish data on their suppliers.

ESRS (European Sustainability Reporting Standards) are the technical standards defining the content of the CSRD sustainability report. They were adopted by the European Commission delegated act in July 2023 and are applicable from the first covered financial year.

The ESRS architecture comprises two types of standards:

Cross-cutting standards:

• ▸ESRS 1: general reporting principles (double materiality, value chain, comparability)
• ▸ESRS 2: general disclosures on governance, strategy and management of risks and opportunities

Thematic standards:

• ▸Environmental: ESRS E1 (climate change), E2 (pollution), E3 (water and marine resources), E4 (biodiversity), E5 (circular economy)
• ▸Social: ESRS S1 (own workforce), S2 (workers in the value chain), S3 (affected communities), S4 (consumers and end-users)
• ▸Governance: ESRS G1 (business conduct)

The double materiality principle is central: a company must report not only on ESG risks and opportunities that affect its financial performance (financial materiality), but also on its impacts on the environment and society (impact materiality). This dual approach fundamentally distinguishes CSRD from previous voluntary frameworks (GRI, SASB, TCFD).

A CSRD-compliant sustainability report includes several mandatory blocks, regardless of the applicable thematic standard:

Block 1 — Strategy and business model: description of the business model, upstream and downstream value chains, sustainability strategy and its links with the overall strategy.

Block 2 — Governance: role of governing bodies in supervising sustainability matters, due diligence processes, adopted policies, objectives and targets.

Block 3 — Management of impacts, risks and opportunities: process for identifying and assessing material impacts, measures taken, monitoring indicators.

Block 4 — Metrics and targets: quantitative indicators with time comparisons, quantified targets and measured progress.

For companies subject to the EU Taxonomy, the report must also include Taxonomy information (proportions of aligned, eligible and non-eligible activities).

The quality of a sustainability report depends first on the quality of the data collection system. This is often the weak point in the early years of reporting.

Step 1 — Double materiality analysis. Identify ESG issues relevant to your sector and value chain, assessing them along two dimensions: the company's impact on the environment and society, and the effect of ESG issues on financial performance. This analysis must be documented and validated by governance bodies.

Step 2 — Identify data sources. For each material issue, identify internal sources (HR, operations, procurement, accounting) and external sources (suppliers, service providers, sector databases). The granularity required by ESRS is significantly higher than previous carbon balance sheets or CSR reports.

Step 3 — Establish data governance. Designate a responsible person for each data stream, define collection, validation and error-correction procedures. Without explicit governance, ESG data will not withstand independent verification.

Step 4 — Integration into information systems. In 2026, tools such as Sweep, Greenscope, Persefoni or the CSR modules of SAP allow part of the collection to be automated. But before any tool, the quality of data mapping is decisive.

The statutory accountant plays a central role in implementing CSRD reporting, at several levels.

Scope and obligation diagnosis: the accountant can determine whether your company falls within the CSRD scope, at what date and under which standards. This analysis requires cross-referencing financial thresholds, legal structure and ongoing events (acquisitions, stock market listings).

Structuring the sustainability report: the logic of ESRS is close to that of accounting standards: double entry, temporal comparability, justification of estimates. The accountant is able to structure the report according to this logic and ensure consistency between financial and sustainability information.

Preparation for independent verification: the CSRD sustainability report is subject to certification by an independent third-party body — which may be a statutory auditor or an accredited certification body. The H2A published updated guidelines in January 2026 on the sustainability information certification engagement. Preparing for this verification requires the same level of documentation as a financial audit.

Articulation with the EU Taxonomy: the EU Taxonomy (Regulation 2020/852) requires companies subject to NFRD or CSRD to publish proportions of turnover, capex and opex aligned with sustainable activities defined by the Taxonomy. This articulation is complex and requires both accounting and legal expertise.

Hayot Expertise Advice: the first sustainability report of a company is rarely perfect. What matters in 2026 is having a robust data collection system, a documented double materiality analysis and explicit governance. A concise but solid report is worth more than an exhaustive but indefensible one during verification.

Mistake 1: treating the ESG report as a voluntary CSR report. CSRD imposes precise standards, defined metrics and verification. The free format of previous CSR reports is not compatible.

Mistake 2: neglecting the value chain. ESRS require reporting on impacts and risks throughout the value chain (suppliers, subcontractors). A company that does not collect data from its suppliers cannot produce a compliant report.

Mistake 3: confusing financial materiality and impact materiality. Double materiality is the heart of CSRD. A company reporting only on climate-related financial risks misses half the framework.

Mistake 4: separating ESG and financial reporting. CSRD integrates sustainability information into the management report. Both must be consistent. A contradiction between ESG information and financial note disclosures creates a qualification risk during verification.

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(Official sources: CSRD Directive 2022/2464; ESRS adopted by delegated act July 2023; AMF on sustainability reporting; H2A sustainability certification guidelines January 2026; EU Taxonomy Regulation 2020/852)

What is the difference between ESG reporting and CSRD sustainability reporting?

ESG reporting generically refers to the publication of Environmental, Social, Governance information. The CSRD sustainability report is its mandatory regulatory version, subject to ESRS standards, integrated into the management report and verified by an independent third party. Any company subject to CSRD must produce a sustainability report compliant with ESRS, not simply a generic ESG report.

Which SMEs are subject to CSRD in 2026?

In 2026, CSRD applies to large companies (turnover > EUR 40M, balance sheet > EUR 20M or > 250 employees, meeting two criteria over two financial years). Listed SMEs on regulated markets were targeted for 2026 but the timetable is under review with the Omnibus directive. Unlisted SMEs below the thresholds are not directly concerned but may be indirectly affected through their value chain.

What is double materiality in ESRS standards?

Double materiality is the principle that a company must assess its sustainability issues from two angles: the impact of its activities on the environment and society (impact materiality), and the effect of ESG risks and opportunities on its financial performance (financial materiality). Both dimensions must be documented and justify the issues retained in the report.

Who can certify a CSRD sustainability report?

Verification of the sustainability report is entrusted to an independent third-party body, which may be a statutory auditor registered with the H2A or an accredited certification body. In 2026, certification is at limited assurance level (less demanding than a full audit). The H2A published specific guidelines in January 2026 on the modalities of this engagement.