What is CSRD and who does it apply to?

The Corporate Sustainability Reporting Directive (CSRD) is the EU regulation that requires companies to report on environmental, social, and governance factors using standardized European Sustainability Reporting Standards (ESRS). It applies to all large EU companies, listed SMEs, and non-EU companies with significant EU revenue.

How can a regulatory intelligence tool help with CSRD compliance?

A regulatory intelligence tool tracks updates to ESRS standards, delegated acts, EU Taxonomy criteria, and national transposition measures in real time. This helps ESG teams stay current on reporting requirements without manually scanning dozens of official sources.

What are ESRS standards?

European Sustainability Reporting Standards (ESRS) are the detailed reporting standards that companies must follow under CSRD. They cover environmental topics like climate change, pollution, water, biodiversity, and resource use, as well as social and governance topics. The standards are developed by EFRAG and adopted by the European Commission.

How often do ESG regulations change?

ESG regulations are among the fastest-evolving regulatory areas globally. The EU alone issues regular updates to CSRD delegated acts, taxonomy criteria, and sector-specific standards. Add national transposition timelines and global frameworks like ISSB, and the pace of change requires continuous monitoring.

ESG and CSRD Regulatory Intelligence: Staying Ahead of Sustainability Reporting Requirements

ESG and sustainability reporting have moved from voluntary disclosure to mandatory obligation across the European Union. The Corporate Sustainability Reporting Directive (CSRD), European Sustainability Reporting Standards (ESRS), and the EU Taxonomy are creating a dense regulatory environment that demands continuous monitoring. For ESG teams, staying current is no longer a nice-to-have: it is a compliance requirement.

This article breaks down the key ESG regulatory developments in 2026 and explains how regulatory intelligence tools help sustainability teams track the fast-moving landscape of reporting standards, delegated acts, and national transposition measures.

What is the current state of ESG regulation in 2026?

The ESG regulatory landscape has shifted dramatically since 2023. What was once a patchwork of voluntary frameworks has consolidated into binding legislation with specific reporting requirements, audit obligations, and enforcement mechanisms. Here are the three pillars driving the change.

CSRD implementation

The Corporate Sustainability Reporting Directive entered into force in January 2023, with the first reporting obligations applying to large listed companies for fiscal year 2024 reports. In 2026, the scope expands to include all large EU companies meeting two of three criteria: over 250 employees, over EUR 50 million in net revenue, or over EUR 25 million in total assets.

Listed SMEs face their first reporting obligations starting in 2026, though a transitional opt-out period extends to 2028. Non-EU companies with significant EU revenue (above EUR 150 million) will also come into scope in subsequent years.

For ESG teams, the challenge is not just understanding the directive itself but tracking the continuous stream of implementing measures, technical guidance, and national transposition laws across EU member states. Each country may introduce additional requirements or timelines when transposing the directive into national law.

ESRS standards evolution

The European Sustainability Reporting Standards define exactly what companies must report under CSRD. The first set of sector-agnostic standards covers 12 topics across environmental, social, and governance categories, from climate change and pollution to workforce conditions and business ethics.

Sector-specific standards are being developed by EFRAG (European Financial Reporting Advisory Group) to provide more detailed reporting requirements for high-impact industries. These will add another layer of complexity, as companies in sectors like energy, mining, or agriculture will need to meet both general and sector-specific requirements.

The standards themselves are subject to revision. The European Commission has the power to adopt, modify, or delay individual standards through delegated acts. Monitoring these delegated acts is critical because a change can affect reporting scope, metrics, or timelines with relatively short notice.

EU Taxonomy updates

The EU Taxonomy regulation establishes a classification system for environmentally sustainable economic activities. Companies subject to CSRD must report the proportion of their revenue, capital expenditure, and operating expenditure aligned with Taxonomy criteria.

The Taxonomy is expanding. New technical screening criteria are being added for additional economic activities, and the environmental objectives beyond climate (covering water, circular economy, pollution, and biodiversity) are being further developed. Each update potentially changes which activities qualify as "green" and how companies calculate their alignment ratios.

Why is ESG regulatory monitoring uniquely challenging?

ESG regulation presents monitoring challenges that go beyond traditional compliance areas. Several factors make it particularly difficult to track manually.

Multiple regulatory layers: A single reporting obligation may involve the CSRD directive, ESRS standards, delegated acts, EFRAG guidance, national transposition laws, and audit standards. All of these evolve independently.
Rapid pace of change: ESG is one of the fastest-evolving regulatory domains globally. New standards, amendments, and guidance documents are published frequently, sometimes with overlapping or conflicting timelines.
Global fragmentation: While the EU leads with CSRD, other jurisdictions are developing their own frameworks. The ISSB (International Sustainability Standards Board) standards, SEC climate disclosure rules in the US, and national frameworks in the UK, Switzerland, and Asia-Pacific create a mosaic of requirements for multinational companies.
Cross-functional impact: Unlike chemicals or pharma regulation, ESG reporting touches every part of the organization: finance, operations, HR, supply chain, and governance. Regulatory updates need to reach all of these teams, not just the sustainability department.
Interpretation uncertainty: Many ESG standards are still being finalized or interpreted by regulators. Early guidance may change, and companies that rely on initial interpretations risk having to redo their reporting processes.

What should an ESG regulatory monitoring program cover?

A comprehensive ESG monitoring program needs to track official sources at multiple levels. Here is a practical breakdown.

EU institutions

European Commission (delegated acts, implementing regulations, FAQs)
EFRAG (ESRS standards, draft standards, guidance)
European Parliament and Council (legislative amendments)
Official Journal of the EU (binding legal texts)
European Securities and Markets Authority (ESMA) (enforcement guidance)
European Banking Authority (EBA) (financial sector ESG disclosure)

National transposition

National gazette publications for each EU member state where you operate
National financial regulators (BaFin in Germany, AMF in France, CONSOB in Italy)
National audit oversight bodies

International frameworks

ISSB / IFRS Foundation (global sustainability standards)
SEC (US climate disclosure rules)
UK Financial Conduct Authority (UK sustainability disclosure)
Swiss Federal Council (Swiss climate reporting)

How does Obsidian support ESG compliance teams?

Obsidian Monitoring Advisory ESG and CSRD coverage provides real-time tracking of the regulatory sources that matter most for sustainability reporting teams.

Here is how the platform helps:

Real-time tracking of CSRD developments: Delegated acts, ESRS updates, and EU Taxonomy changes are detected as soon as they are published in official sources.
National transposition monitoring: Track how individual EU member states are implementing CSRD requirements, so you can adapt your reporting for each jurisdiction.
Official sources only: Every update links directly to the publishing institution. No reliance on secondary analysis or news commentary that may lag or misinterpret the original text.
Customizable alerts: Configure email notifications for specific topics (ESRS updates, Taxonomy changes, national legislation) so your team receives only what is relevant to their responsibilities.
Cross-team access: With per-user licenses, you can provide monitoring access to sustainability, finance, legal, and operations teams, each with their own notification preferences.

The platform integrates into existing workflows through the Enterprise API, allowing you to feed regulatory updates directly into your ESG reporting software, GRC platform, or internal dashboards.

Steps to strengthen your ESG monitoring in 2026

If your organization is subject to CSRD or preparing for upcoming ESG reporting obligations, here are concrete steps to take now:

Map your reporting scope: Identify which CSRD phase your company falls under and which ESRS standards apply based on your double materiality assessment.
Identify your regulatory sources: Build a list of every EU, national, and international body whose publications could affect your reporting obligations.
Automate monitoring: Manual tracking of ESG regulation is no longer feasible given the volume of changes. A dedicated monitoring platform ensures nothing falls through the cracks.
Establish internal communication flows: Define how regulatory updates reach the teams that need to act on them. Sustainability teams, finance, legal, and board-level governance all need timely information.
Track delegated acts closely: The European Commission has significant power to modify ESRS requirements through delegated acts. These can change reporting metrics, timelines, or scope with limited lead time.

ESG regulation will continue to expand in scope and complexity. Organizations that invest in automated, real-time monitoring today will be better positioned to meet reporting deadlines and avoid compliance gaps. Explore Obsidian pricing to get started.

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