CSRD Reporting Requirements for US Companies 2026: The Omnibus Reset

If your team is still working off the €150 million EU turnover threshold, stop. The Content Directive enacted in March 2026 replaced that number, and the entire compliance landscape for US parent companies has shifted. This article is a decision framework for US CFOs and ESG teams who already know CSRD exists and now need to answer three specific questions: Are we still in scope? What is our actual first reporting year? And should we be preparing against full ESRS or waiting for the dedicated non-EU standard that EFRAG is finalising right now?

Key takeaway: The Omnibus package raised the non-EU parent scoping threshold from €150 million to €450 million in EU turnover, added a second €200 million subsidiary/branch condition, and confirmed the first reporting year for US parents as FY2028 (published 2029). The rules changed materially. Your compliance strategy should too.

Are US Companies Still Subject to CSRD Reporting Requirements After the Omnibus Changes?

Yes, but far fewer of them. The Omnibus I package introduced what KPMG calls "the significant recalibration of CSRD scoping thresholds, which now capture only the largest EU-based companies and non-EU parents with a meaningful EU footprint." For US companies specifically, the operative instrument is the Content Directive (EU) 2026/470, enacted March 2026, which rewrote the non-EU parent scoping test under Article 40a of the Accounting Directive.

The revised test has two conditions, both of which must be satisfied:

1. EU turnover condition: Net turnover generated in the EU exceeding €450 million in each of the last two consecutive financial years.
2. EU presence condition: Either (a) an EU branch with net turnover exceeding €200 million in the preceding financial year, OR (b) being the ultimate parent of EU subsidiaries with net turnover exceeding €200 million in the preceding financial year.

This replaces the original single-condition test of €150 million EU turnover. A US company that clears the €450 million bar but whose EU subsidiary generates only €150 million in turnover does not qualify under the new rules. Both conditions are required.

Worked Example: Do You Still Qualify?

Scenario B is the trap. Many companies that were scrambling under the old €150 million threshold will find they no longer qualify once the €200 million subsidiary condition is applied. Run the two-part test before committing further resources.

The "Two Consecutive Years" Mechanic

One nuance almost no competitor content explains: the €450 million EU turnover condition must be satisfied in each of the last two consecutive financial years. A US company that first crossed the threshold in FY2025 would not trigger CSRD obligations until FY2026 also clears the bar. That temporal mechanic can shift your first reporting year and should factor into your planning calendar.

What About EU Subsidiaries of US Parents?

The non-EU parent test under Article 40a is separate from the general EU company scoping test. An EU subsidiary of a US parent is assessed independently under the EU large-company threshold: more than 1,000 average employees AND more than €450 million in revenue, both conditions required. If the EU subsidiary meets that test, it has its own CSRD obligations regardless of whether the US parent clears the Article 40a threshold.

What Did the Stop-the-Clock Directive Actually Change for US Companies?

Directly, very little. The Stop-the-clock Directive (EU) 2025/794, enacted April 2025, postponed effective application dates by two years for Wave 2 and Wave 3 EU-domiciled companies. Member states were required to transpose it by December 31, 2025. The non-EU parent timeline under Article 40a was already set for FY2028, so the Stop-the-clock Directive did not move that date.

This is one of the most common misunderstandings in US-facing CSRD content. US teams sometimes read "two-year delay" and assume their own deadline shifted. It did not. The first sustainability statements for non-EU parent companies remain due in 2029, covering financial year 2028.

What Is the Revised CSRD Timeline for US Parent Companies?

One transposition wrinkle: until each EU member state transposes the Content Directive into national law by March 19, 2027, the original CSRD thresholds technically remain in force in that jurisdiction. US companies with EU subsidiaries in multiple member states should track transposition progress country by country, particularly in jurisdictions where the subsidiary is large enough to trigger the old thresholds.

Full ESRS or Wait for the N-ESRS? The Preparation Strategy Question

This is the most consequential decision US compliance teams face right now, and it is almost entirely absent from competitor content.

US parent companies subject to CSRD will not report under the full ESRS. They will report under a dedicated standard called the ESRS for Third-Country Undertakings, now formally referred to as the N-ESRS. EFRAG resumed work on this standard in June 2026 after a pause during the Omnibus negotiations, incorporating the revised Article 40a thresholds.

As EFRAG stated in its June 3, 2026 news release: "The dedicated standard will need to be applied by non-EU groups with significant EU activities as defined in the scope of Article 40a of the Accounting Directive."

The N-ESRS Development Timeline

The 100-day public consultation is contingent on the simplified ESRS being adopted as a Delegated Act first, which the European Commission targeted for mid-July 2026. EFRAG will also host educational webinars in the second half of July 2026 across different time zones to present the draft N-ESRS structure.

Should You Prepare Against Full ESRS Now?

The honest answer is: partially. The N-ESRS is expected to be a lighter, tailored version of the full ESRS, but it will retain the double materiality framework and the XBRL/ESEF digital tagging requirements. Preparing the foundational elements now, specifically the double materiality assessment, data governance infrastructure, and assurance readiness, is not wasted effort. Those elements will carry over regardless of which standard ultimately applies.

What you should not do is build a full ESRS disclosure programme against all 12 standards and 1,000-plus data points before the N-ESRS Exposure Draft is published. Wait for the July 2026 consultation document, then calibrate your scope accordingly.

Participate in the N-ESRS Field Test

EFRAG opened a field test alongside the N-ESRS development process. Participating companies simulate application of the Exposure Draft, complete a questionnaire within 70 days, and feed directly into the standard's design through one-to-one EFRAG interviews in October 2026. All responses are treated confidentially. This is a genuine opportunity to shape the standard your company will eventually be required to follow, and no competitor content has flagged it for US audiences. Monitor EFRAG's N-ESRS project page for field test updates.

The SEC Climate Rule Rescission: What It Actually Means for CSRD Strategy

On May 29, 2026, the SEC proposed to formally rescind its climate-related disclosure rules in their entirety (Release No. 33-11421). The comment period closes August 3, 2026. The proposal covers amendments to Regulation S-K (Items 1500-1508), Regulation S-X, Regulation S-T, and multiple forms including Form 10-K, Form 10-Q, and Form 20-F.

The SEC argued the rules "exceed the Commission's statutory authority" and are "inconsistent with a registrant-specific, materiality-based approach to disclosure that best serves the interests of registrants and investors."

Some US ESG teams have read this as reducing their overall sustainability disclosure burden. The opposite conclusion is more accurate. CSRD is now the only binding sustainability disclosure obligation for large US multinationals with EU operations. There is no longer a parallel US federal mandate to harmonise with or use as a baseline. For companies that were hoping to satisfy both the SEC and CSRD with a single disclosure programme, that path is closed. CSRD compliance stands alone as the regulatory driver.

This also changes the cost-benefit calculus. CSRD preparation can no longer be justified partly as SEC readiness. It must be justified on its own terms, which for companies with significant EU revenue and EU subsidiaries above the Article 40a thresholds, it clearly can be.

What CSRD Actually Requires: The Operational Checklist

For US companies that confirm they are in scope, the compliance programme involves several elements that differ materially from current US practice.

Double Materiality Assessment

CSRD requires a double materiality perspective. Companies must assess and report both:

• Impact materiality: How their activities affect society and the environment.
• Financial materiality: How sustainability issues affect their financial performance.

This is fundamentally different from the SEC's single-materiality, investor-focused approach. The double materiality assessment is the gateway to the entire ESRS reporting process. It determines which of the 12 ESRS standards apply to your company and which disclosures are required. Starting this assessment in 2026 or early 2027 is the right sequencing for a FY2028 first report.

Assurance Requirements

All CSRD sustainability reports require third-party assurance. The initial requirement is limited assurance, with a trajectory toward reasonable assurance over time. This is a significant departure from US practice, where sustainability reports are typically unaudited or subject only to voluntary assurance.

US companies need to engage an assurance provider now, not in 2028. Building audit-ready data processes, internal controls over sustainability reporting, and documentation trails takes 18 to 24 months. Companies that wait until FY2027 to begin assurance readiness will not be ready.

XBRL/ESEF Digital Tagging

CSRD sustainability reports must be included in the management report and digitally tagged in the European Single Electronic Format (ESEF) using XBRL. US companies are familiar with SEC EDGAR XBRL, but ESEF uses a different taxonomy and format. EFRAG's 2026 Work Programme explicitly prioritises XBRL taxonomy updates and the ESRS Knowledge Hub, signalling that digital tagging requirements will be a formal part of the N-ESRS framework. Build ESEF capability into your technology roadmap now.

Value-Chain Data Requests

Under the revised CSRD, in-scope companies are required to limit information requests to value-chain companies with fewer than an average of 1,000 employees. This cap protects smaller US suppliers who receive data requests from EU customers or partners. If your company is receiving CSRD-related data requests from EU counterparties today and has fewer than 1,000 employees, you are not obligated to respond beyond what the voluntary standard covers.

Interoperability With ISSB

EFRAG's 2026 Work Programme explicitly prioritises "advancing interoperability with international standards (ISSB, GRI, GHG Protocol) to reduce fragmentation." For US companies already preparing IFRS S1/S2-aligned disclosures for UK or Canadian requirements, this interoperability mapping creates a genuine opportunity to reduce duplicative effort. The ESRS-to-ISSB overlap is real and growing. Map it before building parallel workstreams.

What If We Fall Out of Scope After the Omnibus Changes?

US companies that no longer meet the revised Article 40a thresholds are not required to report under CSRD. But EU customer and investor pressure does not disappear with a regulatory exemption. EFRAG has developed a Voluntary Standard for companies outside mandatory scope, based on the VSME issued in December 2024 and endorsed by the European Commission in July 2025 (Commission Recommendation 2025/4984). This provides a structured, EU-recognised framework for responding to value-chain data requests without committing to full CSRD compliance.

For US companies receiving pressure from EU partners but sitting below the Article 40a thresholds, the voluntary standard is worth evaluating as a proportionate response.

FAQ

Is the original €150 million EU turnover threshold still in effect for US companies? No. The Content Directive (EU) 2026/470, enacted March 2026, replaced it with a two-part test: net EU turnover exceeding €450 million in each of the last two consecutive financial years, AND an EU subsidiary or branch with net turnover exceeding €200 million. Both conditions must be met.

What is the first reporting year for a US parent company under CSRD? Financial year 2028, with the sustainability statement published in 2029. The Stop-the-clock Directive did not change this date; it applied to EU-domiciled Wave 2 and Wave 3 companies only.

What is the N-ESRS and how is it different from the full ESRS? The N-ESRS (formally, ESRS for Third-Country Undertakings) is a dedicated sustainability reporting standard being developed by EFRAG specifically for non-EU parent companies subject to Article 40a. It is expected to be a lighter, tailored version of the full ESRS while retaining double materiality and XBRL/ESEF requirements. The Exposure Draft public consultation is expected in the second half of July 2026, running for 100 days.

Does the SEC rescinding its climate rules reduce our CSRD exposure? No. The SEC's proposed rescission (Release No. 33-11421, comment period closes August 3, 2026) removes the US federal sustainability disclosure mandate entirely. It does not affect CSRD obligations, which are EU law. For large US multinationals with qualifying EU operations, CSRD is now the only binding sustainability disclosure requirement.

Should we prepare against full ESRS now or wait for the N-ESRS? Build the foundations now: double materiality assessment, data governance, and assurance readiness. Do not build a full ESRS disclosure programme against all 12 standards before the N-ESRS Exposure Draft is published in July 2026. Review the consultation document, then calibrate your scope.

Is ESG reporting still relevant for US companies in 2026? For large US multinationals with qualifying EU operations, it is legally mandatory under CSRD. For others, EU customer and investor pressure continues regardless of the SEC rescission. The EFRAG Voluntary Standard provides a proportionate framework for companies outside mandatory scope.

For a broader overview of post-Omnibus CSRD obligations for US companies with EU operations, see Finrep's CSRD reporting requirements guide for US companies with EU operations.