The CSRD, which stands for the Corporate Sustainability Reporting Directive, is EU Directive (EU) 2022/2464 on corporate sustainability reporting. It requires covered companies to report on environmental, social and governance issues in their management report in accordance with uniform standards, and replaces the previous Non-Financial Reporting Directive (NFRD). The European Sustainability Reporting Standards (ESRS) specify exactly what must be reported. With the Omnibus I package, the EU has significantly reduced the number of companies required to report from 2026.
What does the CSRD regulate?
The CSRD ensures that sustainability information is no longer included in a voluntary or separate report, but appears as a distinct section within the management report. This section is subject to external audit, similar to financial reporting, albeit with a more limited scope of audit.
The topics a company must address are determined by the dual materiality analysis. This considers two aspects: firstly, how the company impacts the environment and society; and secondly, how sustainability issues, in turn, have a financial impact on the company. The ESRS organise the content into overarching standards and topic-specific standards covering the environment, social issues and corporate governance. For buildings, the ESRS E1 climate standard is particularly relevant. Among other things, it covers energy consumption, Scope 1, 2 and 3 greenhouse gas emissions, as well as climate targets and transition plans.
Who is required to report under the Omnibus Package?
Originally, the CSRD was to be phased in gradually to cover all large companies with 250 or more employees and capital market-orientated small and medium-sized enterprises. With the Omnibus Directive (EU) 2026/470, which came into force in March 2026, the EU has significantly restricted this scope. Since then, only companies with more than 1,000 employees and a net turnover of more than 450 million euros are, in principle, subject to reporting requirements. Both criteria must be met simultaneously; the thresholds also apply to parent companies at group level.
Smaller companies in the supply chain are afforded additional protection: companies subject to reporting obligations may, in principle, only require them to provide information to the extent set out in the voluntary VSME standard. As things stand, Germany has not yet transposed the CSRD into national law. The deadline for transposing the omnibus amendments is March 2027.
What does the CSRD mean for commercial property operators?
Under the Omnibus Directive, many operators of hotels, care homes, schools or office buildings are no longer required to report themselves. However, this does not mean the issue is resolved. Large hotel groups, hospital and care home groups, as well as institutional owners and tenants, may still fall under the CSRD and will need reliable consumption and emissions data for their sites. Anyone who lets to such companies, manages buildings on their behalf or is part of a group subject to reporting requirements must expect to receive corresponding data requests. Financing partners, too, request sustainability metrics as part of their own disclosure obligations.
In practice, the bottleneck rarely lies in drafting the report but rather in the data. To meet the requirements of ESRS E1, energy consumption figures per building, verifiable measurements and documented efficiency measures are required. Those who have so far only been aware of consumption figures once a year via their bills will find it difficult to demonstrate savings. Continuous energy monitoring provides these figures automatically and in a format that can be reused for analysis and audits.
How are the CSRD, ESG and the EU Taxonomy linked?
ESG stands for Environmental, Social and Governance and describes the three areas against which corporate sustainability is measured. The CSRD is the legal obligation to report on these areas in accordance with set standards. The EU Taxonomy is a classification system that defines which economic activities are considered environmentally sustainable. Companies falling under the CSRD must also state in their sustainability report what proportion of their turnover and investments is taxonomy-compliant. For the property sector, criteria relating to the energy efficiency of buildings play an important role in this regard.
Related terms
Sources and information
- Betterspace: Regulatorik, ESG und Resilienz für Betreiber
- Betterspace: better.energy radiator control
- EUR-Lex: Richtlinie (EU) 2022/2464 (Corporate Sustainability Reporting Directive)
- EUR-Lex: Richtlinie (EU) 2026/470 (Omnibus-Änderungsrichtlinie zu CSRD und CSDDD)