Jun 19
The EU’s Corporate Sustainability Reporting Directive has been significantly narrowed by the Omnibus I simplification package. Directive (EU) 2026/470 was approved by the Council on 24 February 2026, published in the Official Journal on 26 February 2026 and entered into force on 18 March 2026.
For UK businesses that had been preparing for broad CSRD obligations, the practical question has changed. The priority is no longer assuming that every EU-linked group is in scope. It is working out whether the revised thresholds, value-chain rules or Irish operations still create a reporting or data-request burden.
The CSRD originally brought a much wider group of EU companies and listed SMEs into mandatory sustainability reporting. The Omnibus package reduced that scope to focus on larger companies and limit the knock-on burden on smaller suppliers.
| Area | Previous position | Revised position |
|---|---|---|
| Main company threshold | Large undertakings under the earlier CSRD thresholds | More than 1,000 employees and more than €450 million net turnover |
| Listed SMEs | In scope after phased implementation | Removed from mandatory CSRD scope |
| Third-country groups | Lower EU turnover threshold under the original CSRD | EU net turnover above €450 million, plus an EU subsidiary or branch above the relevant threshold |
| Value-chain requests | Wider data collection from suppliers | Smaller companies should not be asked for more than the voluntary SME standard requires |
| Assurance | Direction of travel towards reasonable assurance | Limited assurance only |
| Sector standards | Previously expected | Removed |
Member States must transpose the CSRD-related amendments into national law by 19 March 2027. Until local implementation is complete, businesses with EU operations should check the law in the relevant Member State as well as the EU text.
The UK is outside the EU, so CSRD does not apply directly to most UK-incorporated companies purely as a matter of UK law. However, it can still matter in 2 main ways.
First, a UK parent group may be caught where its EU activity crosses the revised third-country thresholds. This is now a much higher bar than before, so many mid-market UK groups will fall outside direct CSRD reporting.
Second, UK suppliers may still receive sustainability data requests from large EU customers that remain in scope. The value-chain cap is important here. Smaller suppliers should not be pushed into providing data beyond the voluntary SME sustainability reporting standard. That does not mean customers will stop asking questions, but it gives UK SMEs a clearer basis for a proportionate response.
Our guide to UK Sustainability Reporting Standards compliance for SMEs covers the UK-side picture alongside the EU framework.
For cross-border businesses with Irish subsidiaries or branches, CSRD applies through Irish law. Ireland will need to transpose the Omnibus changes by March 2027. Irish companies above the revised thresholds remain in scope, while Ireland may apply the transitional exemption for wave-one companies that fall outside the new rules for financial years 2025 and 2026.
UK groups with Irish operations should therefore review both the group-level turnover position and the Irish entity’s size. Our Cross-border tax specialists team can support this kind of dual-jurisdiction review, while our article on Irish tax receipts and what cross-border businesses should watch explains wider Irish business considerations.
Most UK SMEs will not have a direct CSRD reporting obligation. Even so, large customers, lenders and investors may still ask for basic sustainability information.
A sensible baseline is to collect reliable Scope 1 and Scope 2 emissions data, document the calculation method, identify material climate-related risks and keep a clear record of customer data requests. This supports both EU customer conversations and emerging UK requirements.
The UK government issued UK SRS S1 and UK SRS S2 on 25 February 2026. The FCA has consulted on using UK SRS for listed companies, with possible phased implementation from 2027. Our article on preparing for UK Sustainability Reporting Standards explains how UK and EU sustainability frameworks may interact.
As accountants Ireland and the wider UK rely on for joined-up advice, SCC can help you assess whether CSRD, UK SRS or customer-led sustainability data requests affect your business. Our SME business solutions and specialist tax teams can help you build a proportionate response.
Get in touch with the SCC team for a CSRD and UK SRS review tailored to your group structure and EU trading position.
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