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Navigating CSRD in 2026: 4 Critical Insights for North American Companies

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Since 2019, the European Union’s Green Deal has taken a leading role in shaping the global climate agenda. The transformative strategy provides a comprehensive roadmap for climate action for companies globally. The EU is accelerating it’s own transition through rigorous environmental standards and economic policy aligned with sustainability goals. The Corporate Sustainability Reporting Directive (CSRD) is the most exhaustive instrument within the Green Deal, and is resharing how companies engage with climate issues, supply chain transparency, and stakeholder expectations. The CSRD also establishes de facto global benchmarks that influence regulators, investors, and businesses, as companies worldwide have reporting responsibilities.

The 2025 Omnibus package presented the biggest change to the CSRD so far. The package aims to strike a balance between transparency in reporting and minimizing administrative burden—helping companies stay competitive while complying with the regulation. As significant uncertainty around reporting regulations and timelines linger in both the USA and Canada, questions remain or the 500 to 1,000 North American companies with CSRD compliance burdens. For the companies wondering how CSRD will impact them and how best to prepare amidst this uncertainty, here are four critical insights into CSRD.

  1. CSRD Continues to Emphasize Double Materiality for Reporting Climate-Related Risks, Impacts, and Opportunities

The Double Materiality Assessment (DMA) is a core requirement under the CSRD. It reflects the EU’s broader goals of sustainable finance, climate transition, and corporate accountability. Companies must assess not only how sustainability issues affect their business (financial materiality), but also how their activities impact people and the planet (impact materiality).

The CSRD positions DMA as the foundation for identifying and disclosing climate-related risks, impacts, and opportunities. It is a powerful lever that links financial performance to environmental and social impacts, and influences corporate strategy, transparency, and accountability. DMA requirements thus remain fully intact post-Omnibus, serving as the foundation for sustainability disclosures under the CSRD.

Beyond regulatory compliance, the DMA also offers strategic value, especially for North American companies. Conducting a DMA supports broader business objectives by enhancing enterprise risk management (ERM), identifying strategic opportunities, and strengthening long-term resilience. These insights can be used in voluntary reporting and be adapted for use in both impact materiality assessments (e.g., for GRI alignment) and financial materiality assessments aligned with emerging ISSB-based regulations worldwide.

  1. CSRD Pushes for Climate Transparency and a Harmonized ESRS Framework

The CSRD enhances transparency by requiring companies to disclose more detailed, standardized, and reliable information on environmental, social and governance issues. Under the CSRD, companies must report on policies, actions, and targets related to a company’s material topics, as identified in the DMA.

The harmonized European Sustainability Reporting Standards (ESRS) framework is central to CSRD, providing the legal basis for consistent, comparable, and comprehensive sustainability reporting. If climate change is deemed material (as it was for all wave 1 CSRD reporters) companies must also disclose EU Taxonomy-aligned financial metrics in addition to other ESRS required metrics such as:

    • greenhouse gas (GHG) emissions

    • transition plans

    • energy consumption and efficiency metrics

    • scenario-planning

    • climate-related financial risks, impacts, and opportunities

These requirements establish a global baseline for climate transparency and accountability in alignment with leading frameworks such as the TCFD, ISSB, GRI, and CDP. Through the ESRS, the CSRD ensures the availability of reliable, comparable, and auditable climate-related data. 

 

  1. CSRD Empowers Companies to Embed Strategic Climate Action into Business Models

Companies leading on the climate agenda have embedded climate action within their core business strategy and operating model. Embedding climate action both reduces exposure to physical and transition climate risks, and provides a competitive advantage in the transition to a low-carbon economy. 

CSRD empowers companies to take this action by requiring companies to integrate climate risks, opportunities, and transition planning into their core strategies, risk management, governance, and operations. For example, companies must disclose their climate-related governance structures, the board’s role and responsibility in managing climate strategy, and any incentives or performance targets tied to climate goals. Companies are also required to disclose their climate aligned targets and transition plan, pushing companies to develop long-term strategies for decarbonization, and driving long-term value and resilience.

 

  1. CSRD Digitizes and Distributes Climate Data   

Through digitally tagged data, the CSRD bolsters climate action by encouraging the use of both transparent and comparable data. CSRD mandates that companies digitally tag their sustainability disclosures using XBRL (eXtensible Business Reporting Language).

 

This tagging structures sustainability reporting, making it machine-readable, and interoperable. It enables both automated analysis and easier human interpretation, enhancing data comparability, transparency, and strengthens regulatory oversight across the EU and beyond. These requirements provide auditable, standardized climate data, significantly reducing the risk of greenwashing and improving climate accountability.

CSRD is a Global Game-Changer

CSRD is a strategic imperative for companies transitioning to a sustainable, low-carbon economy. Its alignment with the EU Green Deal, integration of double materiality, standardized ESRS reporting, and requirements for digital, auditable climate data position it as a new global benchmark for corporate climate accountability.

For North American companies, especially those operating in the EU, the message is clear: prepare now. Leverage the CSRD to build resilience, align with investor and stakeholder expectations, and future-proof your business. In a time of regulatory uncertainty and rising climate risk, those who take proactive, strategic action today will be better positioned to lead the sustainable markets of tomorrow.

To learn more about CSRD, read our CSRD Factsheet.

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Contributor:

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Daniela Cardozo, Senior ESG Consultant

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