The Corporate Sustainability Reporting Directive has had a turbulent 2026. New directives, delayed timelines, reduced scope and significant simplifications have reshaped the compliance landscape for Irish companies — creating both relief for some businesses and renewed urgency for others.
Here is what Irish organisations need to understand right now.
What Changed in March 2026
The Omnibus 1 Directive — formally EU Directive 2026/470 — was published in the Official Journal of the European Union on 26 February 2026 and came into force on 18 March. It represents the most significant revision to the CSRD framework since the directive was first introduced.
The Omnibus 1 Directive introduced two critical changes for Irish companies.
First, the EU's Stop-the-Clock mechanism — which Ireland gave legal effect to in July 2025 — has been formalised into the directive. This delays CSRD reporting obligations for Wave 2 companies (large EU companies not previously subject to the Non-Financial Reporting Directive) and Wave 3 companies (listed SMEs) by two years respectively, while the broader Omnibus simplification proposals continue through the EU legislative process.
Second, the reporting standards themselves — the European Sustainability Reporting Standards — have been significantly simplified. The latest ESRS draft introduces shorter standards, fewer mandatory data points and clarified guidance, while maintaining the level of rigour required for decision-useful disclosures.
Ireland's Department of Enterprise, Trade and Employment has confirmed it will revise national legislation to reflect these EU-level changes and is focused on quickly implementing the Stop-the-Clock provisions. Member states have until 19 March 2027 to transpose the Omnibus 1 Directive's CSRD amendments into national law.
Who Is Still Required to Report in 2026
The delays and simplifications have created confusion about who is actually in scope right now. The position can be summarised as follows.
Wave 1 companies — those that were already subject to the Non-Financial Reporting Directive, primarily large public interest entities with more than 500 employees — are required to report on 2025 data in 2026. These companies are largely unaffected by the Stop-the-Clock delay and must continue their sustainability reporting obligations.
Wave 2 companies — large EU companies not previously subject to the NFRD — have had their reporting obligations delayed by two years. They were originally required to begin reporting on 2025 data in 2026; that obligation has now been deferred.
Wave 3 companies — listed SMEs — have similarly had their obligations deferred by two years.
One important anomaly affects Irish-listed SMEs specifically. Ireland's transposition of the CSRD treated listed SMEs as large companies under Irish company law, accelerating their compliance timeline and eliminating the standard SME opt-out until 2028. This has created legal uncertainty for some Irish-listed SMEs, and specialist legal advice is recommended for companies in this category.
The SME Reality — Value Chain Pressure
Even for businesses that fall entirely outside the formal CSRD reporting scope, the directive's practical reach extends further than many Irish companies appreciate.
Large companies that are required to report under CSRD must report across their full value chains — meaning they will request structured ESG data from their suppliers, subcontractors and business partners, many of whom are Irish SMEs with no direct CSRD obligation.
EFRAG — the European Financial Reporting Advisory Group — has developed voluntary SME reporting standards (VSME) specifically to address this. The VSME standard provides a practical, structured way for SMEs to record and report ESG information in response to requests from larger CSRD reporters. Crucially, the Omnibus 1 Directive provides that in-scope companies may not require information from value chain partners that exceeds the content of the voluntary standard — effectively capping what can be demanded from Irish SMEs.
The Corporate Sustainability Due Diligence Directive
Alongside the CSRD, the Corporate Sustainability Due Diligence Directive — which requires large companies to identify and address adverse human rights and environmental impacts in their operations and supply chains — has also been revised.
The national transposition deadline for the CSDDD has been extended from July 2026 to July 2027. The commencement of obligations for the first phase of in-scope companies has been deferred to July 2028.
What Irish Companies Should Do Now
The delays and simplifications do not eliminate the need for action — they create a window in which to prepare properly.
For Wave 1 companies currently reporting: the simplifications in the revised ESRS standards are an opportunity to review and streamline existing reporting processes. KPMG Ireland, EY Ireland and PwC Ireland have all published guidance on using the additional time constructively, focusing on data quality, assurance readiness and process improvement.
For Wave 2 and Wave 3 companies with deferred obligations: the two-year delay should be used for genuine preparation — identifying material ESG issues, building data collection processes and understanding what the revised standards will require — rather than treated as an indefinite postponement.
For SMEs in large company value chains: engage with the VSME voluntary standard now. Understanding what your larger customers and partners will ask for — and having a structured way to respond — is a commercial necessity, not merely a compliance exercise.
The regulatory direction of travel is clear. The timelines have shifted. The fundamental requirement — for Irish companies to understand, measure and report on their sustainability impact — has not.
Sustainability Pulse covers climate, energy, ESG and environmental policy through an Irish lens. Subscribe to the Sustainability Pulse Briefing — every Wednesday.