Many articles on the CSRD in Germany were written in 2023 or 2024 and are now outdated. Since Omnibus I, the number of companies in scope has fallen by around 90%, the ESRS have been revised, and the German transposition law has still not been passed. This article sets out the state of play in November 2026: who is in scope, which rules apply, which deadlines matter and what the CSRD means for the German Mittelstand, which is mostly no longer directly in scope.
In short: After Omnibus I (Directive (EU) 2026/470), from financial year 2027 the CSRD only applies to companies with more than 1,000 employees and more than €450m net turnover. In Germany that means around 1,430 companies instead of around 15,250, according to the governing coalition's estimate. As of 1 November 2026, the German CSRD transposition law has not been passed; the 2017 CSR-RUG still applies. The substance is nevertheless clear: a sustainability report as part of the management report (Lagebericht), reporting under the revised ESRS (mandatory from FY2027), a double materiality assessment, EU Taxonomy disclosures and limited assurance by a Wirtschaftsprüfer. Most SMEs are not in scope but receive data requests from customers and banks, limited by the value chain cap.
Who is subject to the CSRD in Germany?
Omnibus I fundamentally changed the scope at EU level. The directive was published in the Official Journal on 26 February 2026, entered into force on 18 March 2026 and must be transposed by 19 March 2027. We cover the details in VSME vs ESRS after Omnibus.
| Original CSRD | After Omnibus I | |
|---|---|---|
| Companies in scope | Large undertakings (2 of 3: >250 employees, >€50m turnover, >€25m balance sheet) and listed SMEs | >1,000 employees and >€450m net turnover (both criteria) |
| Listed SMEs | In scope | Out of scope |
| Non-EU groups | >€150m EU turnover | >€450m EU turnover and EU subsidiary or branch >€200m, from FY2028 |
| Assurance | Limited, later reasonable | Limited only |
| Companies in Germany | approx. 15,250 | approx. 1,430 (from reporting year 2028) |
The German figures come from the explanatory notes to the amendment tabled by the CDU/CSU and SPD parliamentary groups (committee document 21(6)73, 30 March 2026):
- Wave one, around 160 companies: capital-market-oriented companies with more than 1,000 employees and more than €450m turnover, to report on financial year 2025.
- Former wave two, around 1,076 companies: all other companies and groups above both thresholds, listed or not. First report for financial year 2027, published in 2028, following the "Stop-the-clock" Directive (EU) 2025/794.
- Third-country cases, around 200 companies: subsidiaries and branches of non-EU groups, from financial year 2028.
Wave-one companies below the new thresholds: Omnibus I allows Member States to exempt them for financial years 2025 and 2026, and the German amendment uses this option (Art. 96(8) EGHGB-E). Until the law is in force, however, they remain subject to the non-financial statement under the CSR-RUG if they were before.
Status of the German transposition (November 2026)
Germany should have transposed the CSRD by 6 July 2024. A first bill from 2024 lapsed when the previous coalition collapsed. Since then:
| Date | Step |
|---|---|
| 3 Sep 2025 | Federal Cabinet adopts the CSRD transposition bill (printed paper 21/1857), which also transposes the Stop-the-clock Directive |
| Autumn 2025 | First reading in the Bundestag, referral to the Legal Affairs Committee; Bundesrat opinion and government reply |
| 30 Mar 2026 | CDU/CSU and SPD amendment aligns the bill with Omnibus I |
| 13 Apr 2026 | Public hearing in the Legal Affairs Committee |
| 27 Aug 2026 | Government answer to a written question: it supports swift transposition; further timing is up to the Bundestag (printed paper 21/7745, question 56) |
| 20 Oct 2026 | DRSC flags need for clarification on personal and temporal scope to the Legal Affairs Committee |
As of 1 November 2026, we could not find a second and third reading in the Bundestag or publication in the Federal Law Gazette, and no fixed date has been announced. The 2017 CSR Directive Implementation Act (CSR-RUG) therefore still applies: companies that had to publish a non-financial statement continue to do so. According to the IDW, there is no obligation to apply the ESRS for financial year 2025, although many companies use them voluntarily as their framework.
The retroactivity issue: The amendment would apply the new HGB rules to financial years beginning after 31 December 2024. For the roughly 160 wave-one companies, that would mean an ESRS sustainability report and assurance for a year that has already closed. DRSC and IDW consider this constitutionally problematic (Der Betrieb). For former wave-two companies reporting first on FY2027, the delay changes little: Omnibus I must be transposed by March 2027, and the revised ESRS apply directly as an EU regulation.
CSRD requirements in Germany
The following requirements follow from the CSRD, Omnibus I and the German bill as amended. As the law has not been passed, details may still change.
Sustainability report in the management report
The sustainability report replaces the non-financial statement and forms a clearly identifiable section of the (group) management report (sections 289b and 315b HGB-E). A standalone report no longer satisfies the obligation. As part of the Lagebericht, it is reviewed by the supervisory board and filed with the company register (DRSC briefing paper on the government bill, in German).
Reporting under the ESRS
The revised ESRS (Delegated Regulation (EU) 2026/1563) were published in the Official Journal on 21 September 2026, enter into force on 10 November 2026 and are mandatory for financial years starting on or after 1 January 2027. For FY2026, companies can choose between the 2023 ESRS, the revised ESRS in full, or the 2023 ESRS with specific reliefs. See how far the number of datapoints has fallen in our analysis of the revised ESRS 2026 datapoints list, or browse them in the free ESRS Datapoint Explorer 2026.
Double materiality assessment
The double materiality assessment remains the starting point of every ESRS report: it decides which topics you report on and therefore which datapoints you need to collect. The revised ESRS make it more proportionate: top-down conclusions at topic level (ESRS 1 §27), no exhaustive search for every conceivable IRO (§32), value chain assessment with sector or regional data (§33) and updates only on significant change (§34). Read double materiality assessment under the revised ESRS for all changes, our overview of the materiality assessment and the CSRD double materiality guide for the basics.
EU Taxonomy
Companies in scope also include the disclosures under Article 8 of the Taxonomy Regulation (EU) 2020/852 in their sustainability report: the proportion of turnover, CapEx and OpEx associated with Taxonomy-aligned activities.
Assurance by a Wirtschaftsprüfer
The sustainability report is subject to limited assurance; Omnibus I removed the planned move to reasonable assurance. Under section 324e HGB-E as amended, only Wirtschaftsprüfer and audit firms whose registration covers sustainability assurance may perform it, and the financial statement auditor may also be appointed. The German bill does not provide for other independent assurance service providers such as technical inspection bodies. The result is set out in a separate assurance report alongside the audit opinion. See our double materiality assessment audit checklist for what auditors look at.
ESEF format and tagging
The management report including the sustainability report must be prepared in the European Single Electronic Format (ESEF, XHTML) with machine-readable tagging of sustainability disclosures. The amendment defers this obligation to financial year 2027, as the required changes to the ESEF Regulation (EU) 2019/815 are expected to apply from 2027.
Timeline: CSRD deadlines in Germany
| Financial year (report the following year) | Who | What applies |
|---|---|---|
| FY2025 | Companies previously required to publish a non-financial statement | Current law: CSR-RUG, non-financial statement, ESRS voluntary. Under the bill: retroactive sustainability report for around 160 companies above 1,000 employees and €450m (contested) |
| FY2026 | Wave one above the new thresholds | Sustainability report under the 2023 ESRS, revised ESRS or 2023 ESRS with reliefs. Wave-one companies below the thresholds to be exempt |
| FY2027 | All companies above 1,000 employees and €450m (around 1,076 additional) | Revised ESRS mandatory, ESEF tagging, value chain cap applies |
| FY2028 | Non-EU groups (around 200 cases) | Reporting on EU subsidiaries and branches |
| 19 Mar 2027 | Member States | Deadline to transpose Omnibus I |
What does the CSRD mean for the German Mittelstand?
For most mid-sized companies the short answer is: you are no longer directly in scope. Companies below 1,000 employees or €450m turnover fall outside the CSRD after Omnibus I, even if they would have reported from 2025 or 2027 under the original rules. The same applies to listed SMEs.
They are still affected indirectly:
- Customers in the value chain need data on emissions, working conditions or materials from their suppliers.
- Banks and investors request ESG information for their own risk management and disclosures.
- Growth can bring companies close to the thresholds into scope.
Two new rules help. The Voluntary Standard (VS), successor of the VSME (Delegated Regulation (EU) 2026/1560), gives companies with up to 1,000 employees a lean, fixed reporting format with a basic and a comprehensive module and no materiality assessment requirement. And from FY2027 the value chain cap applies: reporting companies may not request sustainability information from partners with up to 1,000 employees beyond what the VS contains. The German bill adopts this cap (section 289c HGB-E). More in VSME vs ESRS after Omnibus.
A lean, voluntary materiality assessment still makes sense for many SMEs: it shows which topics customers and banks rightly ask about, what to add beyond the VS basic module and where the real risks to the business lie.
The real CSRD challenges in 2026
1. Legal uncertainty about the timeline
Wave-one companies are planning without a law in force and with possible retroactivity for 2025. In practice, set up reporting processes that can support both a CSR-RUG non-financial statement and an ESRS report.
2. Data, especially in the value chain
Even with more than 60% fewer mandatory datapoints, data collection remains the biggest effort, and the gaps are usually in the value chain. The revised ESRS allow sector and regional data instead of supplier surveys (ESRS 1 §33), and the value chain cap limits what you may request from smaller suppliers anyway.
3. A proportionate assessment instead of 300 IROs
Many first assessments in 2024 and 2025 scored hundreds of impacts, risks and opportunities (IROs) one by one. The revised ESRS explicitly do not require this. The challenge now is to use this freedom in a traceable way, with documented thresholds and rationales. Our double materiality assessment example shows what that looks like.
4. Audit readiness
Even under limited assurance, the auditor will ask how you arrived at your material topics: who scored, on which scale, using which sources, and why the threshold sits where it does. An assessment scattered across spreadsheets and workshop slides is hard to audit. Build the audit trail in from the start.
5. Resources and expertise
Sustainability teams are small and expectations are high. Whether you run the assessment in-house, with software or with consultants is mainly a question of budget and capacity; we compare the options in double materiality assessment: software vs consultants.
6. Avoid duplicate work with the Supply Chain Act
The German Supply Chain Due Diligence Act (LkSG) still applies. A reform that would, among other things, remove the LkSG reporting obligation was adopted by the federal government in September 2025; we could not verify its final adoption as of November 2026. The due diligence obligations themselves, including the risk analysis, are to remain. Use your LkSG risk analysis as input for the materiality assessment, for example for workers in the value chain, rather than assessing the same risks twice. The revised ESRS explicitly allow stakeholder engagement to be covered through existing due diligence processes (ESRS 1 §42).
Your double materiality assessment under the revised ESRS, audit-ready
Materiality Master guides you through stakeholders, IROs, scoring, thresholds and the materiality matrix, based on the revised ESRS topic structure. Every judgement is documented for your auditor, and the results map directly to the 2026 ESRS datapoints.
Checklist: next steps
- Check scope. Are you (or your group) above 1,000 employees and €450m net turnover? Were you previously required to publish a non-financial statement?
- Monitor the legislation and agree with your auditor how to handle possible retroactivity for 2025.
- Choose your FY2026 option (2023 ESRS, revised ESRS or 2023 ESRS with reliefs) and disclose it.
- Set up or review your double materiality assessment under the revised rules.
- Derive your datapoints from your material topics with the ESRS Datapoint Explorer and the Datapoints Mapping Tool.
- Involve your auditor early on methodology, thresholds and documentation.
- SMEs: prepare for requests with the VS basic module, a lean materiality assessment and, where needed, a reference to the value chain cap.
Conclusion
The CSRD in Germany has become smaller, not simpler. Around 1,430 companies will report under the revised ESRS, with the sustainability report in the management report and assurance by a Wirtschaftsprüfer, while the transposition law is still pending. For companies in scope, a sound and proportionate double materiality assessment determines effort and audit readiness. For SMEs, it is the best preparation for customer and bank requests.
To set up your assessment in a structured, audit-ready way, try Materiality Master for free or compare plans on our pricing page: €449 per month or €2,499 per year with unlimited assessments and users.
