CSRD wave 1 companies: relief for 2025 and 2026

Who are the CSRD wave 1 companies?

The CSRD was phased in by waves. Wave 1 covered large public-interest entities with more than 500 employees, broadly the companies that had reported under the earlier Non-Financial Reporting Directive: listed companies, banks and insurers, and parents of large groups of that kind. They applied the ESRS for financial years beginning on or after 1 January 2024 and published their first sustainability statements in 2025. Later waves were delayed by two years by the stop-the-clock directive, and their scope was then cut by the Omnibus I Directive. See the CSRD after the Omnibus.

Which wave 1 companies can be exempted for 2025 and 2026?

From financial years beginning in 2027, the CSRD applies only to EU companies and groups with more than 1,000 employees and net turnover above 450 million euros. A wave 1 company below either threshold therefore drops out from 2027. For the two years in between, the Omnibus I Directive lets each member state exempt such companies from reporting for financial years 2025 and 2026. It is an option, not an automatic relief: it applies only once a country puts it into national law, and member states have until 19 March 2027 to transpose the directive. Belgium, for example, approved a draft bill in March 2026 that would exempt these companies from the 2026 financial year onwards, but not for 2025. A company that is not exempted under its national law must still report.

What does the quick fix allow?

Commission Delegated Regulation (EU) 2025/1416, published on 10 November 2025 and applying to financial years beginning on or after 1 January 2025, amended the phase-in rules for wave 1 companies:

• All wave 1 companies may omit the anticipated financial effects of sustainability risks and opportunities for 2025 and 2026.
• All wave 1 companies, not only those with up to 750 employees, may use the phase-ins for ESRS E4 on biodiversity, S2 on value chain workers, S3 on affected communities and S4 on consumers and end-users, but must still give summary information on a topic they omit if it is material.
• Companies with up to 750 employees keep their first-year reliefs, including for scope 3 emissions and own-workforce disclosures, for 2025 and 2026.

CSRD wave 1: three companies and their relief

Three wave 1 companies in a member state that has adopted the exemption ask what applies to them.

The bank is above both thresholds, so it keeps reporting: for 2025 with the quick fix reliefs, for 2026 with its choice of standards, and under the revised ESRS from 2027. The utility has the turnover but fewer than 1,000 employees, and the insurer has the employees but less than 450 million euros of turnover, so both leave the CSRD from 2027, and in this member state need not report for 2025 and 2026 either. In a country that has not adopted the exemption, they would report for those years, using the quick fix reliefs.

What options apply to 2026 reports?

For financial year 2026, a wave 1 company still in scope can apply the existing ESRS with the quick fix, the revised ESRS adopted as Delegated Regulation (EU) 2026/1563, or the existing ESRS with selected reliefs taken from the revision, such as the top-down materiality assessment and the undue cost or effort exemption. It must state which it applied. See the revised ESRS and double materiality explained. The top-down approach is explained in running a double materiality assessment.

What happens from 2027?

From financial years beginning in 2027, wave 1 companies above the thresholds report under the revised ESRS with limited assurance; reasonable assurance has been dropped. Wave 1 companies with between 500 and 1,000 employees are no longer required to report. Companies still in scope cannot demand more than the voluntary standard covers from value chain companies with up to 1,000 employees. See sustainability assurance explained. For the difference between the two levels, see limited and reasonable assurance.

What should wave 1 companies do now?

Check employee numbers and net turnover against the thresholds at the right level, the company or the group; check whether and when your member state has transposed the exemption; and decide which version of the ESRS to use for 2026. Companies leaving the CSRD often keep part of their reporting, because banks, investors and customers still ask for emissions and other data, and the voluntary standard gives a lighter framework to do it. See sustainability reporting explained.

This guide is general information. It is not tax or legal advice for your situation.