The European Union’s Corporate Sustainability Reporting Directive (CSRD) is reshaping how companies operate. But here’s what most organisations miss: the “S” in ESG, the social piece, is the hardest part of the puzzle.
At Global Diversity Practice, we help organisations navigate CSRD requirements with confidence, turning compliance into a catalyst for a more diverse, inclusive and high-performing workforce.
What is CSRD?
The Corporate Sustainability Reporting Directive is the EU’s flagship regulation requiring large companies to disclose their environmental, social and governance (ESG) impacts in a standardised, comparable way.
In 2025 and 2026 the EU narrowed and delayed it. The “stop-the-clock” directive pushed back the second wave of reporting by two years, and the Omnibus I directive, in force since 18 March 2026, raised the thresholds so that far fewer companies are in scope. EU countries have until March 2027 to write the changes into national law.
Who does it affect?
- EU companies and groups with more than 1,000 employees and more than €450 million net turnover: both tests must be met. Companies that are newly in scope report in 2028, for financial year 2027.
- Companies that started reporting in 2025 (for financial year 2024): these are the large public-interest companies previously covered by the Non-Financial Reporting Directive. From financial year 2027, only those above the new thresholds stay in scope. EU countries may also exempt those below the thresholds for financial years 2025 and 2026.
- Non-EU groups with more than €450 million net turnover in the EU in each of the last two years, and an EU subsidiary or branch with more than €200 million net turnover: report in 2029, for financial year 2028.
- Listed small and medium-sized companies: no longer in scope.
Smaller companies are not entirely off the hook. Large customers will still ask their suppliers for sustainability data, though the rules now cap those requests for companies with up to 1,000 employees at what a new voluntary standard covers.
What must you report?
CSRD requires reporting against the European Sustainability Reporting Standards (ESRS). The Commission adopted a simplified version in July 2026, with far fewer data points, which applies from financial year 2027. The standards cover:
- ESRS E1–E5, Environmental: climate, pollution, water, biodiversity and the circular economy
- ESRS S1, Own workforce: working conditions, equal treatment and opportunities, including diversity and equal pay
- ESRS S2: workers in the value chain
- ESRS S3: affected communities
- ESRS S4: consumers and end-users
- ESRS G1: governance and business conduct
Not every topic applies to every company. A double materiality assessment decides which ones you report on.
Why the “S” is your biggest challenge
Most organisations can measure their carbon footprint. But where your own workforce is material, ESRS S1 asks you to report on:
- The gender balance of your top management
- Your gender pay gap, and the ratio of the highest pay to median pay
- Your employees by gender, and the percentage of employees with disabilities where the law allows that data to be collected
- Your policies on equal treatment, and confirmed incidents of discrimination, including harassment, on grounds such as gender, ethnic origin, disability, age and sexual orientation
- Working conditions, training and skills development, health and safety, and work-life balance
Looking at that list, most organisations realise they don’t have the data. Or the governance. Or the controls to make it auditable.
This is where we come in.
How we support your CSRD journey
1. CSRD readiness assessment
We assess your current position against ESRS requirements, identifying gaps in data, policy and governance before they become audit issues.
2. Double materiality assessment
Sustainability starts with understanding what matters. We help you conduct a double materiality assessment that identifies which social and governance topics are material to your business.
3. ESRS S1 workforce and diversity gap analysis
We map your existing HR data, policies and practices against the ESRS S1 (Own workforce) requirements.
4. Data collection and governance framework
CSRD requires auditable, comparable data. We help you build the systems, controls and processes to collect and validate social data that meets assurance standards.
5. Training and culture building
Compliance without culture change is hollow. We support leaders and managers in understanding what the “S” really means.
Why Global Diversity Practice?
- DEIB expertise with regulatory knowledge. Most ESG consultancies focus on the “E”. We’ve spent more than 15 years helping organisations build diverse, inclusive workplaces.
- Real-world experience. We’re currently supporting organisations on their CSRD compliance journey.
- End-to-end support. From readiness assessments to data governance to culture change, we don’t just help you tick boxes.
Ready to get started?
For companies in scope, CSRD is mandatory. But how you approach it is a choice.
Organisations that treat CSRD as a compliance exercise will struggle. Those that see it as an opportunity to build stronger, more diverse teams will thrive.
See our CSRD and ESG reporting service, email us at info@globaldiversitypractice.com or get in touch to talk about where you are on your CSRD journey.
