U.S. companies that do business in the EU may fall under the EU Corporate Sustainability Reporting Directive (CSRD). This guide gives a clear path to check if you are in scope and how to prepare a first report. It uses plain steps your finance, legal, and sustainability teams can follow together.
CSRD applies in stages. EU companies already under older rules report first. Large EU companies report next. Non EU parent groups with big EU activity report later at the group level. As of August 27, 2025, non EU companies must report if they have more than €150 million EU net turnover and an EU large or listed subsidiary, or an EU branch with at least €40 million turnover. Their first group level report is due in 2029 for the 2028 year. FinanceCoreFiling website
If you own large EU subsidiaries, some may already report earlier for fiscal years that start in 2025, with first filings in 2026. Scope is set at the consolidated level of the EU entity. This can pull in activity from non EU parts if held under the EU parent. McDermott
There are policy changes under discussion in 2025 that could reduce or phase some duties, but they are proposals and still need approval. Keep monitoring any “omnibus” changes before you change plans. DARTReuters
Reports must follow European Sustainability Reporting Standards (ESRS). ESRS set what you disclose on strategy, governance, policies, targets, and metrics across environmental, social, and governance topics. All companies apply general standards and then disclose topical items that are material. FinanceEFRAG
Your report needs limited assurance. The European Commission will adopt EU level limited assurance standards by October 1, 2026. A later move toward reasonable assurance is planned after more assessment. FinancePosition Green
Digital tagging in XBRL will be required once the EU adopts the ESRS taxonomy in the ESEF rules. Prepare now, but note that tagging becomes mandatory only after that adoption. EFRAG
Start with a short scope check.
Keep one page with who is in scope, the year in scope starts, and where to report. This avoids debate later and helps leaders focus on the right year and entities. CoreFiling websiteMcDermott
Name a small core team from finance, sustainability, legal, IT, and internal audit. Give each person a clear role. Set up a monthly steering check with the CFO and the general counsel. Keep the plan short:
Short, steady routines beat long decks. Finance
CSRD uses “double materiality.” You assess two lenses:
Use interviews, simple scoring, and a short paper trail to select topics. Then compare your current disclosures and data to ESRS needs. Flag gaps in policies, targets, and metrics. Keep the output as a ranked list of work items with owners and due dates. EFRAG
Make a small data map that shows each metric, its source system, field name, owner, and refresh cycle. Examples:
Add basic checks: required fields, valid ranges, and code lists. Keep change logs for mapping rules and calculations. Store evidence that ties each number to its source so the assurance team can re trace it. Start with the metrics that double materiality marked as high. Finance
Plan for limited assurance from year one. Align with your statutory auditor or an approved assurance provider early. Share your materiality results, your data map, and your control list. Ask what evidence they expect for each metric and policy claim. Build a short “prepared by client” list that names a document and an owner for each item. Keep version notes and dates.
EU guidance says the Commission will adopt limited assurance standards by October 1, 2026. A later move toward reasonable assurance will be set after review. Design your file so it can support a stronger level in the future without major rework. FinancePosition Green
Choose where the CSRD section will sit in your annual report and who signs it. Draft clear text that explains your business, strategy, risks, policies, targets, and metrics that are in scope. Keep terms simple and define any technical words.
Get ready for digital tagging. Track the ESRS taxonomy progress. When the EU adopts it into the ESEF rules, tagging becomes mandatory. If you tag early in a pilot, you will find label and structure issues before filing. EFRAG
Before your first full year, run a short pilot for two or three high priority metrics and one policy area. Produce a mock note, tag it, and walk it through an internal review. Fix issues in data, wording, and evidence. After you publish, run a short lessons session and update your plan and controls.
Scope mistakes. Missing a branch or a listed EU subsidiary can throw off your timeline. Keep a single scope sheet and update it each quarter. McDermott
Weak evidence. If numbers or claims lack a clear trail, assurance will stall. Keep inputs, calculations, outputs, and a short note for each metric. Finance
Supplier data gaps. Some metrics need supplier inputs. Start with key suppliers and set simple templates and due dates. Use estimates with clear methods only when allowed and document them.
Digital tagging late. Waiting on tagging creates last minute risk. Track taxonomy status and test tagging on your top metrics in a draft. EFRAG
Policy changes. The EU may simplify parts of reporting. Treat news as proposed until adopted. Do not pause core work like materiality, data, and controls. DARTReuters
Below is a practical plan for a first year in scope. Adjust dates to your year end.
Month 1 to 2
Month 3 to 4
Month 5 to 6
Month 7 to 8
Month 9 to 10
Month 11 to 12
This plan keeps work small and steady. It builds a report that meets ESRS, passes limited assurance, and can scale when rules evolve.
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