Article 3 rewrites the transitional scope in Article 5(2) of the CSRD. It separates the financial years 2024 to 2026 from financial years starting on or after 1 January 2027, deletes the listed SME wave, and gives Member States a limited exemption for 2025 and 2026.

Article 5(2) of Directive (EU) 2022/2464 is the provision that tells a Member State which companies must apply the sustainability reporting measures, and from which financial year. Article 3 of the amending directive changes it in three ways.

First, for financial years starting between 1 January 2024 and 31 December 2026, the population remains public-interest entities that are large undertakings or parent undertakings of a large group above 500 employees on average. The amending directive keeps that population for the transitional years. Second, for financial years starting on or after 1 January 2027, the population is undertakings and parent undertakings that exceed both EUR 450 million net turnover and 1,000 employees on average. The old listed SME point (c) is deleted, so that wave does not arrive. The same changes are made to the issuer route in the second part of Article 5(2).

Third, a new derogation lets a Member State exempt undertakings or issuers that do not exceed EUR 450 million net turnover or 1,000 employees from the Article 1 and Article 2 measures for financial years starting between 1 January 2025 and 31 December 2026. The test is disjunctive: a company below either figure can be exempted if the Member State uses the option. The option does not reach the Article 1 point (14) measures, and it does not reach financial year 2024.

The result is a year-by-year answer, not a single threshold. A public-interest entity above 500 employees reports for 2024. For 2025 and 2026 it reports unless its Member State has used the exemption and it is below either the turnover or the headcount figure. From 2027 the test is both figures, and the entity must exceed both.

Article 3 also changes the Commission's review report in Article 6 of the CSRD. The report must assess voluntary take-up of the new standards, and whether the scope should be extended to large undertakings below the threshold and to third-country undertakings operating directly in the Union without a subsidiary or branch. The report on those points is due by 30 April 2031 and every three years thereafter. The rest of the review is due by 30 April 2029.

Why it matters

Most commentary collapses the transition into one date. The directive does not. A company that was in scope for 2025 may be out of scope for 2027, and a company that was never in the 2024 wave may still be caught by the 2027 threshold. The board paper needs the year-by-year answer.

Dates

The amended transitional provision applies from the transposition date of 19 March 2027. The financial years it governs start on 1 January 2024, 1 January 2025, 1 January 2026 and 1 January 2027. The Commission review on possible scope extension is due by 30 April 2031.

What to do

  • Write the scope answer as a row per financial year, not as one threshold.
  • Check the Member State's use of the 2025-2026 exemption before telling the board the company is out of scope.
  • Remove the listed SME wave from the plan if the company was relying on it.

Source

Article 3, amending Directive (EU) 2022/2464, Directive (EU) 2026/470, OJ L 2026/470, 26 February 2026. Our statement, not the instrument verbatim.

Not legal advice; does not certify. A reading of the article and the duties inside it, not a substitute for the Official Journal text or the national transposing measure.