How to Prepare for CSRD Before 2026

The Corporate Sustainability Reporting Directive (CSRD) has seen several important updates in 2025, most notably through the EU Omnibus Simplification Package. Yet despite these regulatory changes, the question of how to prepare for CSRD remains a critical concern for organisations operating across Europe. The directive represents a major transformation in corporate transparency, moving beyond traditional financial reporting to encompass the environmental, social and governance (ESG) dimensions of business performance. Ahead of 2026, here’s a detailed guide on how to prepare for CSRD.

What is CSRD and Why Does It Matter?

The CSRD replaces and significantly expands upon the earlier Non‑Financial Reporting Directive (NFRD). Its aim is to raise the quality, consistency and comparability of sustainability disclosures by companies and to bring sustainability reporting closer to the level of financial reporting.

Key features of the CSRD

• Applies to a much broader range of companies (large companies, listed SMEs and non-EU companies with significant EU turnover).
• Requires adherence to the newly developed European Sustainability Reporting Standards (ESRS) that set out detailed disclosure requirements across environmental, social and governance topics.
• Introduces mandatory third-party assurance (at least limited assurance) of sustainability information.
• Embeds the concept of double materiality (impact + financial materiality) as a core foundation of what must be reported.
• Has extraterritorial reach: non-EU companies with sufficient EU presence may also be in scope.

The Importance of the CSRD

• Investors, regulators, customers and supply-chain partners increasingly demand robust ESG disclosures; non-compliance could result in reputational damage, loss of access to capital, or regulatory sanctions.
• The CSRD sets the benchmark for transparency in sustainability reporting across Europe and globally, treating sustainability disclosures as a strategic business requirement.
• For many organisations, the transition will require significant changes: data collection, internal controls, governance, assurance and digital tagging.

Given this, understanding how to prepare for CSRD is vital for organisations to avoid being caught unready when deadlines arrive.

How To Prepare For CSRD: Core Compliance Requirements

Preparing for CSRD means addressing several inter-locking requirements. Here are the key areas organisations must focus on:

Scope and timing – who must comply and when

Understanding whether your organisation falls within the scope of CSRD and when you must report is the foundational step in how to prepare for CSRD. According to the Institute of Chartered Accountants in England and Wales (ICAEW), the timing is phased: companies already under the NFRD had to apply from 1 Jan 2024; other large EU undertakings from 1 Jan 2025; listed SMEs from 1 Jan 2026; and non-EU companies with EU turnover from 1 Jan 2028. The European Commission states: “The first companies subject to the Corporate Sustainability Reporting Directive (CSRD) have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.” It is estimated that thousands of companies will eventually be in scope once all the reviews and updates have been completed.

The disclosure framework – ESRS and content

Once in scope, organisations must report in accordance with ESRS. These standards specify what sustainability-related disclosures must be made. Key elements include:

• Strategy, business model and value-chain disclosures.
• Governance disclosures: how sustainability is governed within the organisation.
• Risk, opportunities and metrics/targets (including quantitative information).
• Sector-specific standards (under development) and digital tagging of disclosures.

The concept of double materiality

One of the most significant shifts under the CSRD is the requirement to apply double materiality. An organisation must consider both:

• Impact materiality (inside-out): how the company’s operations affect the environment, people and society.
• Financial materiality (outside-in): how environmental, social and governance issues affect the company’s financial position, performance and prospects.

Learn More: Double Materiality Implementation Guidance | Tunley Environmental

Assurance, digital tagging and value-chain disclosures

• The CSRD requires that sustainability information be digitally tagged (under the European Single Electronic Format – ESEF) to enable machine readability and comparability.
• Limited assurance by an external provider is required in the first year of CSRD-aligned reporting (and reasonable assurance may follow).
• Value-chain disclosures: companies must collect data from upstream and downstream partners (suppliers and customers) and disclose when they cannot yet obtain the data (often with a “grace period”).

Strategic integration

Beyond compliance, organisations must integrate sustainability into their business strategy, governance and operations. The CSRD is not just a reporting exercise; preparing for it means embedding sustainability into decision-making. For instance, the DMA (double materiality assessment) outcome should feed into corporate strategy.

Timeline and key milestones

Knowing when the requirements apply is central to how to prepare for CSRD. Below is a typical timeline (subject to local implementation and possible further adjustments from the European Commission).

There are proposals under the “Omnibus” legislative package to revise thresholds (e.g., companies with >1,000 employees) and postpone some dates, so organisations should make sure to keep ahead of developments in 2026. Therefore, for many UK-based or European organisations aiming to be ready before 2026, the key immediate window is between now and the end of 2025-for-fiscal-2025 reporting.

Step-by-step guide: How to prepare for CSRD

Here is a practical roadmap organisations can follow to get ready for CSRD.

Step 1: Determine scope and perform a gap analysis

• Assess whether your organisation (or group) falls within the CSRD scope (and when). Use criteria such as employee count, turnover, balance sheet total and listed status.

Our CSRD checklist can help your organisation see where you fall in scope: CSRD Checklist | Tunley Environmental

• Map your group structure: for example, EU parent, non-EU parent, subsidiaries and branch operations.
• Conduct a gap analysis: what sustainability disclosures are you already making (e.g., under NFRD, GRI, TCFD) and what new requirements under CSRD/ESRS you will need.
• Estimate the data, process, assurance and system changes needed.

Step 2: Governance, roles and accountability

• Establish clear governance for sustainability reporting: board oversight, sustainability committee, executive sponsor.
• Assign roles for data-collection, reporting, controls and assurance.
• Embed double materiality assessment responsibility: who will conduct it, how often, and how it ties into strategy.

You can get started on DMA here: Double Materiality Assessment | Tunley Environmental

• Define internal controls and processes to assure the data, similar to financial reporting controls.

Step 3: Conduct the double materiality assessment

This is a critical component of how to prepare for CSRD. Use a structured process like this:

• Identify and engage stakeholders (internal & external).
• Identify potentially relevant sustainability matters (impacts, risks and opportunities).
• Assess the “inside-out” (impact materiality) and “outside-in” (financial materiality) dimensions for each matter.
• Determine which matters are material (and thus must be disclosed).
• Map the outcomes to strategic implications and reporting implications.
• Review and update periodically (materiality is not static).

Step 4: Data collection and systems building

• Identify the metrics and disclosures required under ESRS that are material for your organisation.
• Build or enhance data-collection systems that can trace inputs from across operations and value chain (including suppliers/customers).
• Ensure you have processes for data quality, monitoring changes over time audit trail.
• Consider digital tagging (XBRL) and IT systems to enable sustainability disclosures in the required format.
• Map dependencies in your value chain: even if you are not in scope, your suppliers may be and you may be asked for data.

Step 5: Strategy alignment and disclosures preparation

• Align your business strategy with the material sustainability matters identified (from your DMA).
• Choose targets and KPIs for each material matter (qualitative and quantitative).
• Develop narrative disclosures: business model, governance, risk management, performance, targets.
• Draft the sustainability report section (to be incorporated in management report).
• Ensure you consider the value-chain upstream and downstream disclosures (scope 3 emissions, wider social/human rights impacts).

Step 6: Assurance readiness

• Determine which assurance provider will be engaged (audit firm or external assurance service). Tunley’s Sustainability Scientists are well-versed in helping large organisations prepare for CSRD.
• Build internal controls to support sustainability disclosures (data controls, process controls, board oversight).
• Schedule assurance process in alignment with annual reporting cycle.
• Plan for audit trails of value-chain data, assumptions, estimation methods.

Step 7: Publish, review and improve

• Publish the sustainability information alongside (or as part of) the management report in digital tagged form.
• After first report, review feedback from stakeholders, assurance provider and internal governance to improve.
• Update the double materiality assessment periodically, refine data systems, embed sustainability more deeply into operations.

Step 8: Monitor regulatory and standard developments

• Stay alert for updates to the ESRS (including sector-specific standards planned for 2026) and any changes to scope or timing from EU legislation (e.g., Omnibus package).

You can subscribe to Tunley Environmental’s weekly sustainability newsletter to stay up to date on any changes to CSRD: Tunley Environmental Newsletter Sign Up

• Monitor how assurance requirements evolve (e.g., move from limited to reasonable assurance).
• Track how other companies in your sector are reporting (peer benchmarking) and how investors/stakeholders respond.

Common pitfalls & tips for success

When preparing for CSRD, organisations frequently fall into regulatory traps, understanding these and planning around them helps ensure smoother implementation.

• Under-estimating the value-chain scope: many organisations think only about their own operations, but CSRD requires upstream/downstream disclosures and value-chain data. This creates dependencies on suppliers/customers and may take time to retrieve.
• Treating reporting as a tick-box exercise: Without embedding sustainability into strategy and operations, disclosures may become superficial, which undermines credibility and assurance.
• Late start / data-collection and system deficiencies: Waiting until late in the year to collect data, define processes or build systems can lead to insufficient time and quality issues.
• Neglecting assurance readiness: Reporting quality and governance must be robust from day one. If assurance providers identify control weaknesses, reputational risk increases.
• Failing to revisit materiality: Materiality is dynamic, what is material today may change quickly given evolving stakeholder expectations, regulation or business model.
• Ignoring timing and scope changes: Regulatory changes (e.g., thresholds, opt-outs, postponements) may alter your obligations; not monitoring them could lead to missed deadlines.

Learn More: Things to Avoid When Preparing for CSRD Reporting

The Bottom Line

Adequately preparing for CSRD is about embedding transparency, governance, data integrity and strategic alignment into your organisation. By understanding how to prepare for CSRD, organisations can turn a regulatory obligation into a competitive advantage. Starting the process early will mean positioning themselves ahead of the curve in sustainable business practice.