ESRS (CSRD)
Material if it meets the impact test, the financial test or both (revised ESRS 1 ¶35).
Impacts count in their own right.EU reporting · the head-to-head comparison
CSRD vs ISSB: an EU law and a global baseline, compared
The CSRD is EU law that requires in-scope undertakings to report under the ESRS on a double materiality basis, with limited assurance.
The ISSB standards, IFRS S1 and IFRS S2, are a global baseline of disclosure standards built on financial materiality, and they bind a company only where its jurisdiction adopts them.
The financial definitions are aligned, so a UK group facing both can build one evidence base, as the wider standards landscape also shows.
At a glance
The CSRD and the ISSB standards, side by side
Read the table by row: each line is a question a preparer asks, answered once for each regime.
The UK column shows where UK SRS, the UK’s endorsed versions of the ISSB standards, sits.
| Question | CSRD and the ESRS | ISSB standards (IFRS S1 and S2) | UK SRS in the UK |
|---|---|---|---|
| What is it? | EU law in the Accounting Directive; the ESRS are Commission delegated regulations | Global disclosure standards issued by the ISSB | The UK’s endorsed versions, published 25 February 2026 |
| Who must report? | From FY2027, undertakings exceeding both 1,000 employees and €450m net turnover; Article 40a from FY2028 | Whoever a jurisdiction requires or permits | Five UKLR categories, comply or explain, periods from 1 January 2027 |
| Materiality | Double: impact, financial or both | Financial: could it influence primary users’ decisions? | Single (financial), as IFRS S1 (UK SRS S1 ¶18) |
| Topics | Twelve standards: two cross-cutting, five environmental, four social, one governance | S1 general requirements; S2 climate; SASB for industry topics | As IFRS, with SASB reference permissive (“may”) |
| Climate | ESRS E1 | IFRS S2 | UK SRS S2 |
| Assurance | Limited assurance; reasonable assurance path deleted | A matter for the adopting jurisdiction | Disclose any assurance and standard used; no explanation if none |
| Applies from | Revised ESRS: financial years from 1 January 2027 (FY2026 choice) | Effective from 1 January 2024, subject to adoption | Accounting periods from 1 January 2027 |
Law or standard
The CSRD is a duty; the ISSB standards are a tool
The CSRD is an amending directive: it rewrote Articles 19a and 29a of the Accounting Directive, which now require in-scope undertakings to include sustainability information in the management report.
The ESRS give that duty its content, and they are law too, adopted by the Commission as delegated regulations.
Read how each takes effect
IFRS S1 says it is effective for annual reporting periods beginning on or after 1 January 2024, with earlier application permitted as long as IFRS S2 is also applied.
That date binds nobody on its own: a company reports under the ISSB standards only where its jurisdiction requires or permits it.
The IFRS Foundation tracks how jurisdictions do so; for example, it classes Australia as “Partially incorporating ISSB Standards” and Japan as “Adopting ISSB Standards with limited transition”.
The Foundation’s country-by-country picture is set out on ISSB adoption by jurisdiction.
In the UK, the standards were endorsed as UK SRS and are applied to listed companies by the FCA’s PS26/19 on a comply-or-explain basis.
EFRAG advises on the ESRS and the Commission adopts them; EFRAG’s role has no counterpart in the ISSB’s process.
Where the duty comes fromExplore
Module 01 / 04
CSRD
Rewrote Articles 19a and 29a of the Accounting Directive in 2022.
Module 02 / 04
ESRS
Adopted by the Commission as delegated regulations; the revised set is DR (EU) 2026/1563.
Materiality
Double against single (financial) materiality, with one definition shared
This is the difference that drives every other one.
The joint interoperability guidance says the definition of financial materiality in the ESRS is aligned with the definition of materiality in IFRS S1.
Read the two tests in their own words
The regimes still differ, because under the revised ESRS 1 ¶35 impacts “can be material exclusively from an impact perspective, irrespective of whether they are financially material”.
UK SRS S1 ¶18, the same test as IFRS S1, asks whether omitting, misstating or obscuring information could reasonably be expected to influence decisions that primary users of general purpose financial reports make.
The ISSB removed “enterprise value” from the final IFRS S1 to align with the IASB’s definition, as its Basis for Conclusions records at BC34(b) and BC67, so the accurate name for the UK and ISSB test is single (financial) materiality.
The two lenses, side by side, are on single against double materiality, and the UK test in detail on UK SRS materiality.
One sustainability matter
ISSB and UK SRS
Material if it could reasonably be expected to influence primary users’ decisions (UK SRS S1 ¶18).
Impacts count only as sources of risks and opportunities.Who reports
Scope is set by EU law on one side and by each jurisdiction on the other
The CSRD sets its own scope: from financial years beginning on or after 1 January 2027, undertakings that exceed both a net turnover of €450 million and an average of 1,000 employees.
The ISSB standards have no scope of their own; each jurisdiction decides who reports, and this is the position as at 11 October 2026.
Read the scope detail
Groups apply the CSRD test on a consolidated basis, and non-EU groups are reached separately under Article 40a from financial year 2028.
Both limbs must be exceeded, and the CSRD thresholds page, with its scope checker, reads an entity’s figures against them.
In the UK, the FCA’s final rules reach listed companies in five UKLR categories for accounting periods beginning on or after 1 January 2027, and UK SRS S1 and S2 sets out the standards themselves.
The two scopes overlap only where a UK listed group also has an EU entity or EU activity the CSRD reaches.
Who reportsExplore
Module 01 / 04
EU undertakings
Exceeding both 1,000 employees and €450m net turnover, from FY2027.
Module 03 / 04
Non-EU groups
Article 40a from FY2028: EU turnover above €450m in two years and an EU subsidiary or branch above €200m.
Module 04 / 04
ISSB reporters
Whoever a jurisdiction requires or permits; in the UK, five listing categories.
What gets reported
Twelve ESRS against two IFRS standards, and where the topics land
The ESRS are twelve standards: two cross-cutting and ten topical, covering environmental, social and governance matters.
The ISSB has two: IFRS S1 for general requirements and IFRS S2 for climate, with the SASB Standards as a source of industry topics.
Read how the content compares
Under IFRS S1 an entity identifies its sustainability-related risks and opportunities and considers the SASB Standards; the UK changed that consideration from “shall” to “may” in UK SRS S1 ¶¶55(a) and 58(a).
Under the ESRS the topical standards apply only to the topics the double materiality assessment finds material, and immaterial information “shall not” be disclosed (revised ESRS 1 ¶24).
The ESRS on climate and on the workforce are set out on ESRS E1 and ESRS S1, and all twelve on the ESRS page.
The ISSB side is on the IFRS S1 general requirements and IFRS S2.
ContentExplore
Module 01 / 04
ESRS 1 and 2
Cross-cutting: general requirements and general disclosures.
Module 02 / 04
E1–E5, S1–S4, G1
Topical: environment, people and business conduct, each subject to materiality.
Climate
ESRS E1 and IFRS S2: close, with real differences
The joint guidance says “almost all the disclosures in ISSB Standards related to climate are included in ESRS”.
That is not the converse: the ESRS ask for more, and on some points the two simply ask different things.
| Point | Revised ESRS E1 | UK SRS S2 (IFRS S2) |
|---|---|---|
| Scenario analysis | Disclosed if the company uses it | Required (¶22) |
| Resilience | Not required annually | An assessment of resilience required annually (¶B18) |
| Scope 2 | Location-based and market-based | Location-based required; market-based permitted (¶29(a)(v), ¶¶B30–B31) |
| Transition plan | Disclose the plan, or that there is none and whether one will be adopted | No duty to have one; disclose information about one if it exists |
| Materiality | E1 reported only if climate is material; IRO-2 basis if not | Climate risks and opportunities that could affect prospects |
The joint guidance’s own comparison, and its limits, are on the ESRS–ISSB interoperability guide.
It maps the 2023 ESRS paragraph numbers and calls itself educational material, not a statement of equivalence.
Assurance
Limited assurance under the CSRD; disclosure of assurance in the UK
A CSRD sustainability statement carries a limited assurance opinion, and since Omnibus I there is no legislated move to reasonable assurance.
In the UK, the FCA chose to require disclosure of any assurance obtained and the standards used, not assurance itself.
Read the assurance detail
The CSRD opinion covers the process the undertaking carried out to identify the information reported, and the Taxonomy disclosures, as assurance under the CSRD sets out.
The FCA said it was not requiring explanations where assurance is not sought, and it deliberately did not name ISSA (UK) 5000 as the standard to use.
In the UK, that means assurance of a UK SRS report is a choice the company discloses, not a duty the FCA imposes, as at 11 October 2026.
AssuranceExplore
Module 01 / 04
CSRD
A limited assurance opinion, including on the process to identify the information reported.
Module 04 / 04
UK
Disclose any assurance and the standard used; no explanation where none is sought.
Dates
How the CSRD and the ISSB standards arrived
The two systems were built at the same time; this chronology is as at 11 October 2026.
- 16 December 202201
- June 202302
IFRS S1 and S2 issued
Effective for annual periods beginning on or after 1 January 2024, subject to adoption. - 31 July 202303
- 2 May 202404
Joint interoperability guidance
IFRS Foundation and EFRAG publish the guidance on applying both. - 25 February 202605
- 18 March 202606
Omnibus I in force
CSRD narrowed to 1,000 employees and €450m from FY2027; limited assurance only. - 21 September 202607
- 30 September 202608
- 1 January 202709
Both apply in practice
Revised ESRS for financial years from this date; UK listing rules for accounting periods from this date.
Every CSRD date in one place is on the CSRD timeline.
A UK group reporting under both
One evidence base, two reports
A UK listed group with a large EU subsidiary may report under UK SRS for the group and under the ESRS for the EU entity.
One double materiality assessment can serve both, because its financially material subset is the natural starting point for UK SRS.
Read the dual-reporting detail
The impact-only findings stay on the EU side unless they would move cash flows, access to finance or cost of capital.
The UK report still needs what UK SRS S2 asks and E1 does not, such as scenario analysis and an annual resilience assessment.
The EU statement still needs what the ESRS ask and UK SRS does not, such as market-based Scope 2 and the social and governance standards found material.
The UK and EU rules for a group in that position are compared on how the CSRD and UK SRS compare, UK SRS against the ESRS and the ESRS against UK SRS.
- 1
Map the entities
Which group companies the CSRD reaches, and which listing the FCA rules cover.
- 2
Run one assessment
A double materiality assessment that records the financial lens separately.
- 3
Take the financial subset
The aligned financial definition carries to UK SRS.
- 4
Add what each asks
ESRS impacts and topics; UK SRS S2 scenario analysis and resilience.
An illustrative reporting year
How the two reports run through one year
This sequence is an illustration for a UK listed group with an in-scope EU subsidiary, not a timetable either regime prescribes.
- 01 / Scope01
Confirm who reports what
The EU entity under the CSRD; the listed parent under the FCA rules. - 02 / Assess02
One materiality assessment
Both lenses recorded separately, with thresholds written down. - 03 / Collect03
- 04 / Draft04
- 05 / Assure05
- 06 / Review06
Reassess at the next reporting date
Both regimes ask for materiality judgements to be revisited.
Who writes the rules
Two standard-setting routes, and the UK’s own step
The ESRS are drafted with EFRAG’s advice and adopted by the Commission, so they arrive as EU law.
The ISSB standards arrive as standards, and each jurisdiction decides whether to endorse, adopt or require them.
Read the UK step
The UK published its endorsed versions as UK SRS S1 and S2 on 25 February 2026.
The FCA then applied UK SRS to listed companies in PS26/19, on a comply-or-explain basis.
A UK company that is not listed in those categories has no UK SRS duty from PS26/19, as at 11 October 2026.
Who sets the rulesExplore
First years
Transition reliefs on each side
Both regimes phase their first years, but in different ways.
The FCA lets listed companies report on climate first, with two years’ relief for other UK SRS S1 topics and one year for Scope 3.
Read the EU transition detail
For FY2026, a reporting undertaking may choose among three options under Article 2(2) of DR (EU) 2026/1563, stating which version it applied.
From FY2027 the revised ESRS apply in full to every undertaking in the new scope.
First-year reliefsExplore
Module 03 / 04
ESRS FY2026
Three options for FY2026, with a statement of the version applied.
What goes wrong
Six mistakes in comparing the two
“Every company must apply the ISSB standards from 2024”
They are effective from 2024 only where a jurisdiction adopts them.
“The ISSB test is an enterprise value test”
The ISSB removed “enterprise value” from the final IFRS S1 (BC34(b)); its test, and UK SRS’s, is single (financial) materiality, while the ESRS use double materiality.
“The materiality definitions differ”
The financial definition is aligned; the ESRS add the impact lens.
“An ESRS report is an ISSB report”
The joint guidance is educational, not a statement of equivalence.
“CSRD scope is two of three size tests”
From FY2027 it is both 1,000 employees and €450m net turnover.
“Both require reasonable assurance in time”
The CSRD path to reasonable assurance was deleted; the UK requires disclosure of assurance, not assurance.
What this page does not do
It does not rank the two systems or recommend one; it sets out what each requires, from the instruments themselves, as at 11 October 2026.
The shared ground
Where the CSRD and the ISSB meet
The overlap is real and deliberate: the financial side of the two systems was aligned while both were written.
The financial materiality page sets out that shared test in each framework’s words.
Read the shared-ground detail
Under UK SRS S1 ¶C2 an entity may consider the GRI Standards and the ESRS as sources of guidance, which does not bring double materiality with it.
Considering the ESRS as a source does not turn an ESRS statement into an ISSB one; each regime’s own requirements still apply.
Stakeholder engagement for the impact side has no ISSB counterpart; the ESRS approach is on double materiality stakeholder engagement.
Shared groundExplore
Module 03 / 04
Sources of guidance
The GRI Standards and the ESRS may be considered as sources of guidance.
Module 04 / 04
IASB definition
IFRS S1 materiality was aligned with the IASB’s definition.
Frequently asked
Questions people ask
What is the difference between the CSRD and the ISSB standards?
The CSRD is EU law: it requires in-scope undertakings to publish sustainability information in the management report, prepared under the ESRS, on a double materiality basis, with limited assurance.
The ISSB standards, IFRS S1 and IFRS S2, are a global baseline of disclosure standards built on financial materiality; they bind a company only where a jurisdiction adopts or requires them.
Is the CSRD stricter than the ISSB standards?
It asks more in two ways.
It adds impact materiality, so a matter can be reportable on its impacts alone, and its twelve standards cover environmental, social and governance topics beyond climate.
On climate, the joint guidance says almost all ISSB climate disclosures are included in the ESRS, but the ESRS also ask for things the ISSB standards do not.
Do the CSRD and the ISSB use the same definition of materiality?
The financial-materiality definition is aligned, according to the joint ESRS–ISSB interoperability guidance.
The regimes differ because the ESRS add the impact lens: a matter is material under the ESRS if it meets the impact test, the financial test or both, while the ISSB standards apply financial materiality only.
Who has to report under the CSRD?
From financial years beginning on or after 1 January 2027, undertakings that exceed both a net turnover of €450 million and an average of 1,000 employees, and groups on a consolidated basis.
Non-EU groups are reached separately under Article 40a from financial year 2028.
Who has to report under the ISSB standards?
Nobody, by the standards alone.
IFRS S1 and IFRS S2 are effective for annual periods beginning on or after 1 January 2024, but a company reports under them only where its jurisdiction requires or permits it.
In the UK, listed companies in five categories report against UK SRS, the UK’s endorsed versions, on a comply-or-explain basis from 2027.
Is UK SRS the same as the ISSB standards?
Almost.
UK SRS S1 and S2 are the UK’s endorsed versions of IFRS S1 and S2, published on 25 February 2026.
The differences are listed in Annex A of the government’s response; for example, the UK changed “shall” to “may” for considering the SASB Standards, and removed the effective date so application follows UK law or regulation.
Does a CSRD report satisfy the ISSB standards?
Not automatically.
The joint guidance explains how an entity applying the ESRS can also comply with the ISSB climate standard with a limited number of points to consider, but it is educational material, not a statement of equivalence, and it maps the 2023 ESRS paragraph numbers.
Does an ISSB or UK SRS report satisfy the CSRD?
No. The CSRD requires the ESRS, which add impact materiality and topics beyond climate.
A company reporting under UK SRS still needs the impact work and the wider topical standards for any entity the CSRD reaches.
Is assurance required under the CSRD and the ISSB standards?
The CSRD requires limited assurance, and the reasonable-assurance path was deleted in 2026.
In the UK, the FCA asks listed companies to disclose whether assurance was obtained and the standards used, and does not require an explanation where none is sought.
How do ESRS E1 and IFRS S2 differ on climate?
The revised ESRS E1 asks about climate scenario analysis only if the company uses it and does not require an annual resilience analysis, while UK SRS S2 requires scenario analysis and an annual resilience assessment.
UK SRS S2 requires location-based Scope 2 and permits market-based; ESRS E1 asks for both.
What is the difference between the ESRS and IFRS S1?
IFRS S1 is a general-requirements standard for sustainability-related financial information, focused on risks and opportunities that could affect the entity’s prospects.
The ESRS are twelve standards, two cross-cutting and ten topical, covering impacts as well as risks and opportunities.
When does each apply?
The revised ESRS apply to financial years beginning on or after 1 January 2027, with a three-way choice for FY2026.
IFRS S1 and S2 have been effective for annual periods beginning on or after 1 January 2024, subject to adoption.
UK SRS applies through the FCA’s rules for accounting periods beginning on or after 1 January 2027.
Can one assessment serve both?
One evidence base can.
The financially material subset of a double materiality assessment is the natural starting point for UK SRS or the ISSB standards, because the financial definitions are aligned; the impact-only findings stay on the EU side.
Which is better for a UK company to follow voluntarily?
That depends on who reads the report, not on which is better.
UK SRS is the UK’s own route for listed companies; the ESRS matter where the CSRD reaches a group; nothing on this page ranks one above the other.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
Checked against 15 sources fromEUR-LexIFRS FoundationIFRS Foundation / EFRAGDepartment for Business and TradeFinancial Conduct Authority
- EUR-LexDirective 2013/34/EU, consolidated 18 March 2026 — Articles 19a, 29a and 40a
Where the CSRD duty sits: both limbs of double materiality, and the 1,000-employee and €450m test from FY2027.
- EUR-LexDirective (EU) 2022/2464 (the CSRD), OJ L 322, 16.12.2022
The amending directive that put sustainability reporting into the Accounting Directive.
- EUR-LexDirective (EU) 2026/470 (Omnibus I)
In force 18 March 2026: the narrowed CSRD scope and limited assurance only.
- EUR-LexCommission Delegated Regulation (EU) 2026/1563 — the revised ESRS
Twelve standards; in force 10 November 2026; applies to financial years beginning on or after 1 January 2027.
- IFRS FoundationIFRS S1 General Requirements — Navigator page
Effective for annual periods beginning on or after 1 January 2024, with earlier application if IFRS S2 is also applied.
- IFRS FoundationIFRS S2 Climate-related Disclosures — Navigator page
The ISSB’s climate standard.
- IFRS FoundationIFRS S1 Basis for Conclusions — BC34(b), BC67, BC69
“Enterprise value” removed from the final Standard; materiality aligned with the IASB’s definition.
- IFRS Foundation / EFRAGESRS–ISSB Standards Interoperability Guidance, 2 May 2024
The financial-materiality definition is aligned; almost all ISSB climate disclosures are included in the ESRS.
- Department for Business and TradeUK SRS S1 General Requirements
The UK’s endorsed version of IFRS S1: single (financial) materiality.
- Department for Business and TradeUK SRS S2 Climate-related Disclosures
Scenario analysis, an annual resilience assessment and location-based Scope 2.
- Financial Conduct AuthorityPS26/19 — UK SRS on a comply-or-explain basis
Five UKLR categories, accounting periods beginning on or after 1 January 2027.
- Financial Conduct AuthorityPS26/19 (PDF) — the assurance response to Question 10
Disclose any assurance obtained and the standard used; no explanation required where none is sought.
- IFRS FoundationSASB Standards
Industry-based topics the ISSB maintains; 77 industries in 11 sectors.
- IFRS FoundationJurisdictional Profile: Australia (updated 12 June 2025)
An example of how a jurisdiction takes up the ISSB Standards, in the Foundation’s own classification.
- IFRS FoundationJurisdictional Profile: Japan (updated 16 July 2026)
A second example: SSBJ Standards functionally aligned with the ISSB Standards.
Continue reading
Read next
Interoperability
The joint interoperability guidance
The joint guidance in detail: what aligns, what does not, and its limits.
EU directives
CSRD vs CSDDD
Reporting against due diligence: two EU directives, two scopes.
Landscape
Global sustainability standards
The wider landscape: ISSB, ESRS, GRI and SASB.
Scope
CSRD thresholds
Who the CSRD reaches from FY2027, with a scope checker.