CSRD Timeline: When Your Company Must Report Scope 3

The CSRD Phased Rollout — As It Now Stands

The EU's Corporate Sustainability Reporting Directive (CSRD, CELEX 32022L2464) does not apply to everyone at once. It phases in by company size and listing status. The original phase-in lived in Article 5(2) of the CSRD. In 2025 the EU adopted a “stop-the-clock” amendment — Directive (EU) 2025/794, CELEX 32025L0794 — that postponed the second and third reporting waves by two years to give the Commission time to simplify the framework. The table below reflects the timeline after that amendment.

The unchanged Wave 1 date is set out in the CSRD itself:

“(a) for financial years starting on or after 1 January 2024: (i) to large undertakings within the meaning of Article 3(4) of Directive 2013/34/EU which are public-interest entities as defined in point (1) of Article 2 of that Directive exceeding on their balance sheet dates the average number of 500 employees during the financial year…”
— Directive (EU) 2022/2464 (CSRD), Article 5(2), first subparagraph, point (a)(i), CELEX 32022L2464. Retrieved 2026-06-04 from EUR-Lex.

The two-year postponement of Waves 2 and 3 is the operative change introduced by the stop-the-clock Directive:

“Article 5(2) of Directive (EU) 2022/2464 is amended as follows: (a) the first subparagraph is amended as follows: (i) in point (b), the introductory wording is replaced by the following: ‘for financial years starting on or after 1 January 2027:’; (ii) in point (c), the introductory wording is replaced by the following: ‘for financial years starting on or after 1 January 2028:’…”
— Directive (EU) 2025/794, Article 1, CELEX 32025L0794. Retrieved 2026-06-04 from EUR-Lex.

The Directive's recital states the reason in plain terms — to spare companies that have not yet reported from incurring costs while the rules are simplified:

“…in order to provide for legal clarity and to avoid the undertakings currently required to report for financial years beginning on or after 1 January 2025 and on or after 1 January 2026 incurring unnecessary and avoidable costs, the sustainability reporting requirements for those undertakings should be postponed by two years.”
— Directive (EU) 2025/794, recital (3), CELEX 32025L0794. Retrieved 2026-06-04 from EUR-Lex.

The practical effect: if your company is a large undertaking that is not a public-interest entity with more than 500 employees, your first CSRD report is now due in 2028 for FY 2027 — not 2026 for FY 2025. Wave 1 companies that began reporting in 2025 are unaffected and continue to report annually.

Which Wave Are You In? The Scope Thresholds

The waves turn on whether your company is a “large undertaking”, a public-interest entity (PIE), or an SME — categories defined in the Accounting Directive (2013/34/EU) that the CSRD amends. A “large undertaking” is one that exceeds at least two of three size criteria (balance-sheet total, net turnover, average employees) on its balance-sheet date; the CSRD itself confirms that these three criteria are the relevant size axes:

“…balance sheet total, net turnover and the average number of employees during the financial year.”
— Directive (EU) 2022/2464 (CSRD), recital (33), CELEX 32022L2464. Retrieved 2026-06-04 from EUR-Lex.

The numeric thresholds for those three criteria are defined in Article 3 of the Accounting Directive (2013/34/EU), which the CSRD amends — and the monetary thresholds have been revised since. Consult the consolidated Article 3 for the figures in force for your reporting year before classifying your undertaking; the wave you fall into then follows from that size category together with whether you are listed on an EU-regulated market and whether you are a public-interest entity.

The 500-Employee Public-Interest-Entity Line

The single most important threshold for timing is the 500-employee public-interest-entity line. A PIE (a listed company, bank, or insurer) with more than 500 employees on average sits in Wave 1 and has been reporting since 2025. Every other large undertaking dropped into Wave 2 — now 2028. The stop-the-clock recital restates the structure of this line:

“Large undertakings that are public-interest entities with more than 500 employees on average during the financial year and public-interest entities that are parent undertakings of a large group with more than 500 employees on average on its balance sheet dates, on a consolidated basis, during the financial year are to report in 2025 for financial years beginning on or after 1 January 2024. Other large undertakings and other parent undertakings of a large group are to report in 2026 for financial years beginning on or after 1 January 2025.”
— Directive (EU) 2025/794, recital (3), CELEX 32025L0794 (describing the pre-amendment dates, which Article 1 then postpones by two years). Retrieved 2026-06-04 from EUR-Lex.

Non-EU Parent Companies (Wave 4)

A third-country group is pulled into scope when it generates significant turnover in the Union and has an EU subsidiary or branch. The controlling threshold is EUR 150 million of net turnover in the Union:

“…third-country undertakings which generate a net turnover of more than EUR 150 million in the Union and which have a subsidiary undertaking or a branch on the territory of the Union should be subject to Union sustainability reporting requirements. To ensure the proportionality and enforceability of such requirements, the threshold of having a net turnover of more than EUR 40 million should apply to the branches of third-country undertakings…”
— Directive (EU) 2022/2464 (CSRD), recital (20), CELEX 32022L2464. Retrieved 2026-06-04 from EUR-Lex.

ESRS E1: The Climate Standard That Requires Scope 3

Whatever wave you fall into, the content of the climate chapter is set by the European Sustainability Reporting Standards (ESRS), adopted as Commission Delegated Regulation (EU) 2023/2772, CELEX 32023R2772. Within the ESRS, ESRS E1 (Climate change) is the topical standard that mandates greenhouse-gas disclosure — including Scope 3. Its core quantitative disclosure is E1-6 (Gross Scopes 1, 2, 3 and Total GHG emissions).

What E1-6 Actually Requires

The umbrella obligation is set out in paragraph 44, which requires four figures, each in metric tonnes of CO₂-equivalent:

“The undertaking shall disclose in metric tonnes of CO2eq its: (a) gross Scope 1 GHG emissions; (b) gross Scope 2 GHG emissions; (c) gross Scope 3 GHG emissions; and (d) total GHG emissions.”
— ESRS E1, paragraph 44, Commission Delegated Regulation (EU) 2023/2772, CELEX 32023R2772. Retrieved 2026-06-04 from EUR-Lex.

Each of the four figures then has its own detailed paragraph:

• Scope 1 (par. 48) — direct emissions, plus the percentage from regulated emission-trading schemes. Par. 48 reads: “the gross Scope 1 GHG emissions in metric tonnes of CO2eq; and (b) the percentage of Scope 1 GHG emissions from regulated emission trading schemes.”
• Scope 2 (par. 49) — indirect emissions from purchased energy, reported both location-based and market-based: “the gross location-based Scope 2 GHG emissions… and (b) the gross market-based Scope 2 GHG emissions…”
• Scope 3 (par. 51) — value-chain emissions from each significant Scope 3 category: “The disclosure of gross Scope 3 GHG emissions required by paragraph 44 (c) shall include GHG emissions… from each significant Scope 3 category (i.e. each Scope 3 category that is a priority for the undertaking).”
• Total (par. 52) — the sum of Scopes 1, 2 and 3, disaggregated by location-based vs market-based Scope 2.

_[Pins verified against source: par. 44 = umbrella four-figure requirement; par. 48 = Scope 1 detail; par. 49 = Scope 2 detail (location + market based); par. 51 = Scope 3 detail (per significant category); par. 52 = total. Earlier drafts that pinned Scope 1 to par. 48(a)(iii) or treated par. 49 as Scope 1 were wrong.]_

The Methodology Application Requirements (AR 39)

The application requirement AR 39 is where audit defensibility is won or lost. It fixes which gases, which protocol, and which global-warming-potential values must be used:

“When preparing the information for reporting GHG emissions as required by paragraph 44, the undertaking shall: (a) consider the principles, requirements and guidance provided by the GHG Protocol Corporate Standard (version 2004)… (b) disclose the methodologies, significant assumptions and emissions factors used… (c) include emissions of CO2, CH4, N2O, HFCs, PFCs, SF6, and NF3. Additional GHG may be considered when significant; and (d) use the most recent Global Warming Potential (GWP) values published by the IPCC based on a 100-year time horizon to calculate CO2eq emissions of non-CO2 gases.”
— ESRS E1, Application Requirement AR 39, CELEX 32023R2772. Retrieved 2026-06-04 from EUR-Lex.

So the seven Kyoto-basket gases (CO₂, CH₄, N₂O, HFCs, PFCs, SF₆, NF₃) must be captured, IPCC 100-year GWP values applied, and every emission factor and assumption disclosed and justified. That is the standard an assurance provider tests against.

The Scope 3 First-Year Relief (Under 750 Employees)

There is one widely-misread exemption. A company or group not exceeding 750 employees on average may omit Scope 3 — and total GHG emissions — but only for its first year of reporting:

“Undertakings or groups not exceeding on their balance sheet dates the average number of 750 employees during the financial year (on a consolidated basis where applicable) may omit the datapoints on scope 3 emissions and total GHG emissions for the first year of preparation of their sustainability statement.”
— ESRS 1, Appendix C (List of phased-in Disclosure Requirements), ESRS E1-6 row, CELEX 32023R2772. Retrieved 2026-06-04 from EUR-Lex.

This is a one-year grace, not a permanent carve-out, and it suspends total GHG emissions along with Scope 3 in that first year.

The Other E1 Climate Disclosures

• E1-1 Transition plan (par. 14–16) — a plan compatible with limiting warming to 1.5 °C in line with the Paris Agreement and climate neutrality by 2050, with decarbonisation levers and investment quantified.
• E1-4 Targets (par. 30–34) — GHG-reduction targets in absolute and, where relevant, intensity terms, covering Scopes 1, 2 and 3, with a base year and at least a 2030 target value: “GHG emission reduction targets shall at least include target values for the year 2030 and, if available, for the year 2050.”
• E1-5 Energy consumption and mix (par. 35–39) — total energy consumption in MWh split across fossil, nuclear and renewable sources, with the renewable share disclosed.

What a Limited-Assurance Auditor Verifies

CSRD assurance starts at the limited-assurance level. The CSRD describes the limited engagement as one that gives a conclusion in a negative form — the auditor states that nothing has come to their attention suggesting material misstatement — and that involves fewer tests than reasonable assurance:

“The conclusion of a limited assurance engagement is usually provided in a negative form of expression by stating that no matter has been identified by the practitioner to conclude that the subject matter is materially misstated. In a limited assurance engagement, the auditor performs fewer tests than in a reasonable assurance engagement.”
— Directive (EU) 2022/2464 (CSRD), recital (60), CELEX 32022L2464. Retrieved 2026-06-04 from EUR-Lex.

The CSRD also sets the trajectory: the Commission is to assess moving from limited to reasonable assurance, with delegated assurance standards to be adopted no later than 1 October 2028:

“…the statutory auditor or audit firm should be required to express an opinion based on a reasonable assurance engagement about the compliance of the sustainability reporting with Union requirements, when the Commission adopts assurance standards for reasonable assurance of sustainability reporting by means of delegated acts no later than 1 October 2028…”
— Directive (EU) 2022/2464 (CSRD), recital (60), CELEX 32022L2464. Retrieved 2026-06-04 from EUR-Lex.

Against that backdrop, a limited-assurance reviewer of E1-6 will look for:

1. Methodology consistency — which emission-factor dataset was used, and was it applied consistently across the inventory (AR 39(b) requires the methodologies, assumptions and factors to be disclosed with reasons).
2. Calculation reproducibility — can the reported CO₂e figures be reproduced from activity data × factors using IPCC 100-year GWP values (AR 39(d))?
3. Completeness — were all significant Scope 3 categories covered, as par. 51 requires?
4. Boundary consistency — do the reported categories match the company's double-materiality assessment, and is year-on-year comparability preserved (par. 47 requires changes in the reporting boundary to be explained)?
5. Comparatives — is prior-period comparative information disclosed for the quantitative metrics, per ESRS 1 par. 83 (with first-year relief under ESRS 1 par. 136)?

Scope 3 Category Materiality

Scope 3 par. 51 requires disclosure for each significant Scope 3 category — not all fifteen GHG Protocol categories mechanically. Which categories are significant is determined through the double-materiality assessment, and that determination must hold together with the rest of the GHG inventory boundary. The patterns below are common starting points for a materiality screening; they are illustrative, not a substitute for the assessment itself:

When the reporting boundary or the definition of the value chain changes between years, par. 47 requires that change to be disclosed and its effect on comparability explained — which is why a stable, documented materiality conclusion matters as much as the numbers themselves.

Getting Started

Whichever wave applies, the preparation sequence is the same:

1. Confirm your wave and first reporting year — map your company against the 500-employee PIE line and the large-undertaking criteria; remember Waves 2 and 3 moved to FY 2027 and FY 2028 under Directive (EU) 2025/794.
2. Run the double-materiality assessment — this gates whether E1 applies at all and which Scope 3 categories are significant.
3. Gather activity data — procurement, energy, travel and logistics data, with enough granularity to apply the right emission factors.
4. Calculate to the AR 39 standard — seven gases, IPCC 100-year GWP, every factor and assumption documented.
5. Prepare for limited assurance — keep the calculation reproducible from inputs × factors, with comparatives per ESRS 1 par. 83.

Frequently Asked Questions

Did the “stop-the-clock” Directive cancel CSRD?

No. Directive (EU) 2025/794 postponed the second and third reporting waves by two years; it did not repeal the CSRD. Wave 1 companies (large public-interest entities with more than 500 employees) continue to report. The amendment's own text only replaces the application dates in Article 5(2) of the CSRD — moving them to “1 January 2027” and “1 January 2028” respectively (Directive (EU) 2025/794, Article 1, CELEX 32025L0794).

My company is a large undertaking but not listed. When do I report?

If you are a large undertaking that is not a public-interest entity with more than 500 employees, you fall into Wave 2. After the stop-the-clock amendment your first report is due in 2028 for the financial year starting on or after 1 January 2027 — the date that Article 1 of Directive (EU) 2025/794 substitutes into Article 5(2), point (b) of the CSRD.

Do I have to report Scope 3 in my first year?

Not necessarily. If your company or group does not exceed an average of 750 employees during the financial year, you “may omit the datapoints on scope 3 emissions and total GHG emissions for the first year of preparation” of the sustainability statement (ESRS 1, Appendix C, E1-6 row, CELEX 32023R2772). This is a one-year relief, and it also suspends the total-GHG figure for that year — not a permanent exemption.

Which greenhouse gases must Scope 3 cover?

The seven Kyoto-basket gases. ESRS E1 Application Requirement AR 39(c) requires the inventory to “include emissions of CO2, CH4, N2O, HFCs, PFCs, SF6, and NF3”, with additional gases considered where significant, and AR 39(d) requires the most recent IPCC 100-year GWP values to convert non-CO₂ gases to CO₂-equivalent (CELEX 32023R2772).

What level of assurance does CSRD require — and will it get stricter?

CSRD begins at limited assurance, where the auditor expresses a conclusion in negative form after fewer tests than a reasonable-assurance engagement (CSRD recital (60), CELEX 32022L2464). The CSRD anticipates a move toward reasonable assurance: the Commission is to adopt reasonable-assurance standards by delegated act “no later than 1 October 2028”, following a feasibility assessment (same recital).

When does a non-EU parent company get pulled into CSRD?

When the third-country group generates more than EUR 150 million of net turnover in the Union and has an EU subsidiary or branch (CSRD recital (20), CELEX 32022L2464). A lower EUR 40 million net-turnover threshold applies to branches. These groups report under the Article 40a regime, with first reports expected for FY 2028.

References, all retrieved 2026-06-04 from EUR-Lex: Directive (EU) 2022/2464 (CSRD), CELEX 32022L2464; Directive (EU) 2025/794 (stop-the-clock), CELEX 32025L0794; Commission Delegated Regulation (EU) 2023/2772 (ESRS Set 1), CELEX 32023R2772.