What is the CSRD and what does it mean for fashion companies?
The CSRD (Corporate Sustainability Reporting Directive) is the EU law requiring large companies to publish audited sustainability information using European reporting standards (ESRS).
In short
The CSRD is the EU Corporate Sustainability Reporting Directive, which requires in-scope companies to report on environmental, social and governance matters in their management report under the European Sustainability Reporting Standards (ESRS). Following the 2026 Omnibus I amendments, it covers far fewer companies, focusing on the largest groups.
How does it work in practice?
In-scope companies carry out a double materiality assessment to decide which sustainability topics to report, then disclose policies, targets, actions and metrics under the ESRS. The information is subject to assurance and published in a digital, tagged format. For fashion, material topics typically include climate, pollution, resource use and circularity, and workers in the value chain.
What changed with the Omnibus?
The Omnibus I Directive was published in the Official Journal on 26 February 2026 and entered into force on 18 March 2026. Member States must transpose the CSRD changes by 19 March 2027.
- Scope: EU undertakings with more than 1,000 employees and net turnover above EUR 450 million.
- Non-EU groups: in scope with more than EUR 450 million EU turnover and an EU subsidiary or branch above a set turnover threshold.
- Value-chain cap: companies with up to 1,000 employees are protected from excessive data requests.
- Standards: simplified ESRS, with double materiality retained, mandatory from the 2027 financial year and voluntary for 2026.
Why does it matter for fashion businesses?
Large brands and retailers must report on their supply chains, so they ask suppliers, agents and wholesale partners for data on emissions, materials and labour conditions. Smaller companies outside the scope are therefore still affected, although the value-chain cap limits what can be demanded of them.
How is AI changing it?
AI tools help collect and classify supplier data, map evidence to ESRS datapoints and draft narrative disclosures. Because reports are assured, every AI-generated figure or statement needs a traceable source and human review.
Common pitfalls
Companies often over-report immaterial topics, rely on unverified supplier estimates or treat the report as a compliance exercise disconnected from strategy.
Frequently asked questions
Does the CSRD still apply to mid-sized fashion companies?
After the Omnibus I amendments, the CSRD applies only to EU companies with more than 1,000 employees and over EUR 450 million turnover. Smaller fashion companies are out of scope but may still receive limited data requests from in-scope customers.
Is double materiality still required under the CSRD?
Yes. The revised ESRS published for consultation in 2026 retain double materiality, while clarifying the assessment and allowing a more top-down approach.