Corporate Sustainability Reporting Directive (CSRD) / ESRS

Classification system defining environmentally sustainable economic activities. Article 8 requires in-scope undertakings to disclose the proportion of turnover, CapEx, and OpEx aligned with the taxonomy. The 2025 Omnibus package narrowed scope and simplified reporting templates.

Enforcement

Mandatory

Effective date

Disclosure obligations apply from 1 January 2022 (phased by environmental objective)

Covered entities

Non-financial and financial undertakings subject to NFRD/CSRD reporting (Article 19a or 29a of Directive 2013/34/EU). Scope narrowed by 2025 Omnibus.

Fund-level and entity-level sustainability disclosure rules for EU financial market participants and advisers. The Commission published a review proposal in November 2025 introducing formal product categories with minimum criteria and reducing disclosure volume. Negotiations ongoing.

Enforcement

Mandatory

Effective date

In application since 10 March 2021

Covered entities

Financial market participants and financial advisers in the EU (asset managers, insurers offering IBIPs, pension providers, investment advisers)

Directive requiring large EU and non-EU companies to identify, prevent, and remedy adverse human rights and environmental impacts in their operations and value chains, and to adopt a climate transition plan. Scope and timelines were revised by the 2025 Omnibus package and Directive (EU) 2026/470.

Enforcement

Mandatory once transposed

Effective date

Member State transposition deadline 26 July 2027. First wave of in-scope companies covered from 2028.

Covered entities

Large EU and non-EU companies meeting employee and turnover thresholds (revised by 2025 Omnibus and Directive (EU) 2026/470).

The Directive amends the Unfair Commercial Practices Directive and the Consumer Rights Directive to ban generic environmental claims (such as eco-friendly or climate neutral) that are not backed by recognised excellent environmental performance, and to prohibit offset-based neutrality claims and unverified future commitments. Sustainability labels must be based on certification schemes or set by public authorities.

Enforcement

Mandatory

Effective date

Transposition deadline 27 March 2026; application from 27 September 2026

Covered entities

Traders selling goods or services to consumers in the EU internal market

The proposed Directive would require companies to substantiate voluntary environmental claims with scientific evidence and have them verified by an accredited third party before use. The file has been suspended since June 2025 following the Commission's stated intention to withdraw the proposal, though it remains formally on the legislative agenda.

Enforcement

Mandatory (if adopted)

Effective date

Not yet adopted; no application date

Covered entities

Traders making voluntary explicit environmental claims about products or services in the EU; micro-enterprise scope is contested

Operators and non-SME traders must collect geolocation data for each plot of production, conduct a due diligence exercise to demonstrate that products are deforestation-free (cut-off 31 December 2020) and produced in accordance with the laws of the country of production, and submit a due diligence statement before placing products on the market or exporting them. Member States must impose dissuasive penalties including fines of at least 4 percent of EU turnover and confiscation of products and revenues.

Enforcement

Mandatory

Effective date

Application from 30 December 2026 (large operators and traders) and 30 June 2027 (micro and small enterprises and natural persons)

Covered entities

Operators and traders that place on, make available on, or export from the EU market relevant commodities (cattle, cocoa, coffee, oil palm, rubber, soya, wood) and listed derived products. Simplified obligations for micro and small enterprises and primary operators.