Status: ✅ Approved EU law, has been delayed by Omnibus I Simplification Package
The Corporate Sustainability Reporting Directive (CSRD) – which entered into EU law in January 2023 – standardizes sustainability reporting across the European Union as part of the European Green Deal and the EU Textile Strategy. By requiring detailed disclosures on environmental, social, and governance matters, the CSRD helps investors, regulators, and consumers better understand and compare the environmental performance of fashion brands.
Recent updates under the EU’s Omnibus I Simplification Package have narrowed the scope of companies required to report and adjust certain CSRD requirements, making it essential for apparel and footwear brands to stay informed on how these changes affect their compliance obligations.
Let’s dive in!
Approved in December 2025, the Omnibus I Simplification Package introduces key changes to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Social Due Diligence Directive (CSDDD), aiming to simplify compliance requirements.
Read all about Omnibus I in our deep dive for apparel and footwear brands here.
As part of the EU’s Omnibus I Simplification Package, the Stop-the-Clock mechanism was adopted in April 2025, delaying the application of certain CSRD and CSDDD requirements. While the CSRD was initially introduced through a wave-based rollout, Omnibus I simplifies this by limiting CSRD to a smaller group of companies defined by clear employee and turnover thresholds – meaning brands with more than 1,000 employees AND over €450 million in net annual turnover remain in scope.
Here is the timeline:
*You may already be aware of the Non-Financial Reporting Directive (NFRD), which introduced similar reporting requirements in the EU. These were deemed insufficient, and in 2021, the CSRD replaced and expanded the NFRD's reporting requirements.
Important to note: Brands with fewer than 1,000 employees or less than €450 million in net annual turnover fall outside of the CSRD scope and do not need to report. For example, a fashion brand with 900 employees and €600 million in net annual turnover is not in scope.
For many big fashion brands, the delayed deadline for CSRD reporting will enable them to implement carbon accounting and life cycle assessment tools and procedures in advance.
The Corporate Sustainability Reporting Directive requires textile companies to publish non-financial information in accordance with the European Sustainability Reporting Standards (ESRS) developed by EFRAG (European Financial Reporting Advisory Group).
The ESRS outlines how and what information and ESG metrics apparel and footwear brands need to report to European regulators to comply with the CSRD. Overall, there are 12 European Sustainability Reporting Standards (ESRS).
In addition to the Climate Standard (ESRS E1) and the publication of Scope 1, 2, and 3 emissions information, the CSRD requires the publication of information relating to water, pollution, biodiversity, and circularity, as well as social information concerning workers and consumers.
EFRAG is also developing sector-specific ESRS for high-impact industries, including textiles. Under the Omnibus I agreement, these sector-specific standards will become voluntary and will be published at a later date.
The 12 topical ESRS continue to be organized into four areas: the cross-cutting standards (ESRS 1–2), the environmental standards (E1–E5), the social standards (S1–S4), and the governance standard (G1).
In December 2025, EFRAG submitted its technical advice on a revised, simplified set of general ESRS standards, reflecting lessons learned in 2024 by ‘wave 1’ reporters and the objectives of the Omnibus I Simplification Package.
Proposed simplification includes:
The European Commission will now prepare the Delegated Act revising the first set of ESRS based on EFRAG’s technical advice.
Although this will implement simplifications, the overall architecture of the ESRS remains unchanged. Fashion brands will continue reporting under the same four pillars – the cross-cutting, environmental, social, and governance standards – and the core disclosure topics such as climate, pollution, biodiversity, water, circularity, workers, and governance all remain in place.
What changes is not the structure, but the way apparel and footwear brands report: fewer data points, clearer guidance, a simpler materiality assessment, and greater flexibility for value-chain data.
Now, let’s see what’s inside the European Sustainability Reporting Standards (information is subject to change as ESRS are being revised).
These standards encompass General Requirements and General Disclosures, which “cross-cut” different sectors and industries. ESRS 1 establishes general requirements, such as important concepts and principles, that must be followed when reporting under the CSRD, while ESRS 2 outlines reporting requirements that must be followed under the three topical standards (Environment, Social, and Governance).
ESRS 1 also introduces the double materiality assessment, which emphasizes the consideration of both the external impacts of an organization’s activities on the environment and society, and the internal impacts of sustainability factors on the organization's financial performance. We’ll explore this in greater detail below.
These five standards require fashion companies to disclose information on greenhouse gas emissions, air and water pollution, and impacts to biodiversity. The ESRS environmental standards also dig into resource usage and circularity. These disclosures apply across the value chain, focusing on material and high-risk stages such as material sourcing, manufacturing, and end-of-life. Under the simplified ESRS, companies may rely on estimates and proxies where primary data is not reasonably available. Carbonfact’s CSRD software helps apparel and footwear brands to measure and disclose the environmental CSRD requirements.
ESRS S1 to S4 represent the social indicators within the European Sustainability Reporting Standards, offering a structured approach for textile brands to report on their social and human rights performance. These provide information on social matters, including employee-related aspects, human rights, and diversity policies. This includes fashion brand employees as well as workers across the value chain.
The governance standard emphasizes corporate governance, including structures, processes, and policies that influence decision-making within an organization. It encourages transparency and accountability in disclosing information related to governance structures, the composition of boards, and measures taken to ensure ethical and responsible business practices. Apparel and footwear brands will be asked to describe their business model and how sustainability considerations are integrated into their strategy. They are also required to report on how the brand identifies and manages sustainability-related risks.
Among the 12 ESRS reporting standards, the ESRS E1 standard on climate change is the most detailed and demanding. It includes nine disclosure requirements and is one of the most comprehensive standards.
There is in the ESRS E1 a clear reference to the GHG Protocol as one of the methods that can be used. Read our ESRS E1 Climate Reporting deep dive for apparel and footwear brands here.
This is a new reporting requirement presented by the CSRD. Simply explained, for each of the ten topical standards in the ESRS, textile companies will need to conduct a materiality assessment, determining what data points are relevant (i.e., material). If not relevant – or material – the brand will not be required to report on them.
It assesses how business actions affect or may affect both sustainability and financial aspects. Taking ESRS E1 Climate Change as an example, what is the impact of climate change on their business financially, and what is the business’s impact on climate change.
That said, for apparel and footwear brands, many of the standards, such as Climate Change, Labor Rights, etc, will definitely be material.
Targets: The Corporate Sustainability Reporting Directive mandates textile organizations to establish concrete targets, choose a baseline, and report their progress in achieving these specified objectives.
Audit requirement: The CSRD introduces an audit assurance requirement for its reporting.
Some apparel and footwear brands were already required to report in 2025 because they were previously subject to the EU’s Non-Financial Reporting Directive (NFRD). These brands formed the first group to transition into CSRD-style reporting, publishing sustainability disclosures for the 2024 financial year ahead of the broader CSRD rollout.
Here are some examples:
Source: Zalando 2024 Sustainability CSRD Digest
Source: Adidas Annual Report 2024
Source: LVMH 2024 Social and Environmental Responsibility Report
While brands technically have until 2027/2028 to fully comply with the CSRD, it’s essential that apparel and footwear brands start preparing now.
We recommend:
As mentioned above, even if your brand’s reporting deadline isn’t until 2027 or 2028, you will need to begin tracking this data within the next two years.
Carbonfact is a CSRD Reporting Software tailored to the needs of apparel and footwear brands. Our solution helps fashion brands and suppliers track, measure, and report in accordance with the ESRS, ensuring they can accurately report on the CSRD. Because our team specializes in the fashion and textile industries, we are uniquely positioned to help brands navigate new EU and U.S. regulations around environmental sustainability.
Here is how:
The platform generates compliant reports that align with the European Sustainability Reporting Standards (ESRS), particularly:
You can export your CSRD report directly from the Carbonfact platform with pre-filled templates
Key benefits:
Bonus: The platform syncs your CSRD report with source data in real-time, so when data updates, your report automatically reflects changes without re-running manual analysis.