CSRD Reporting After the 2026 Rewrite: Which Canadian Companies Are Still In Scope

Two things happened to the Corporate Sustainability Reporting Directive that most Canadian finance teams have not caught up with. In April 2025 the EU stopped the clock on the reporting waves that had not yet started. In February 2026 it narrowed who has to report at all. If your last briefing on CSRD was written in 2024, the scope test you were given no longer applies, and the date you were working towards has moved.

That matters in Canada for a specific reason. Canada has no CSRD equivalent, so nothing in domestic law puts a Canadian company in scope. What puts you in scope is a relationship with the EU: a European parent, European subsidiaries, or European turnover through a branch. The 2026 rewrite changed the numbers on all three tests.

What the February 2026 directive changed

Directive (EU) 2026/470 of 24 February 2026, published in the Official Journal on 26 February 2026, amends the accounting directives, the CSRD and the due diligence directive together. For EU undertakings it restricts mandatory sustainability reporting to those exceeding both of two tests: net turnover above EUR 450 million and an average of more than 1,000 employees during the financial year.

That is a substantial narrowing. The original directive reached large undertakings at far lower thresholds, and it had a wave for listed small and medium enterprises. Both tests now have to be met, not either one, so a company with 1,400 employees and EUR 300 million of turnover falls out.

For companies outside the EU, the same directive raises the thresholds that bring a non-EU group into scope through its European presence. The turnover threshold for a third-country parent moves from EUR 150 million to EUR 450 million, and the threshold applying to a subsidiary or branch is set at EUR 200 million.

When the first report is actually due

The timeline was reset first. Directive (EU) 2025/794, adopted on 14 April 2025 and published two days later, postponed the waves that had not yet begun by two years.

Companies that had already reported under the first wave, largely large listed EU groups, were not given a pause. Everyone else got two years, and the stated reason in the directive was legal clarity and avoiding "unnecessary and avoidable costs" while the simplification work was finished.

Two years sounds generous until you count backwards. A first report on financial year 2027 needs 2027 consumption data collected as it happens, which means the collection has to be working from January 2027. Assurance readiness work happens before that. If a Canadian group is in scope through a European subsidiary, the systems question is live now, not in 2028.

What the standards ask for on energy

The European Sustainability Reporting Standards were simplified alongside the scope change. The Commission's own account of the simplification work is on its sustainability reporting page, and the practical effect for preparers is fewer datapoints rather than a different kind of datapoint.

The energy and emissions content has always come down to a small number of things that are hard to produce and easy to describe:

• Total energy consumption, split between fossil, nuclear and renewable sources, in a consistent unit across every site in the reporting boundary.
• Energy intensity, which means consumption divided by a denominator such as revenue or floor area, so the denominator has to be as reliable as the numerator.
• Scope 1 emissions from fuel burned on site, which is a conversion problem applied to metered gas and other fuel volumes.
• Scope 2 emissions from purchased electricity, heat, steam and cooling, reported on both location-based and market-based methods, which needs the contractual instruments as well as the consumption.
• Comparatives, because the second report has to sit beside the first.

Not one of those is conceptually difficult. All of them break on the same thing: the underlying consumption record is spread across utility invoices in several formats, several currencies, several billing calendars and several countries, and nobody has ever had to reconcile it to a financial-grade standard before.

The four data problems that actually cost time

Billing periods do not line up with the financial year

A utility bill covers a service period that almost never matches a calendar month, let alone a fiscal year boundary. Reporting a financial year of consumption means apportioning the bills that straddle the start and the end of it, consistently, and being able to explain the rule you used. Doing that by hand across a few hundred accounts is where the first reporting cycle disappears.

Units and conversion factors drift

Gas arrives in cubic metres in one country and therms or gigajoules in another. Heat is billed in kilowatt-hours or megajoules. Converting is arithmetic, but the factors have publication dates, and a report that silently uses this year's factor on last year's comparative is not comparable. Dating the factors is part of the record, not an afterthought.

Estimated and corrected bills

Utilities estimate a read, then correct it two months later. If your consumption series takes the first figure and never revisits it, your annual total is wrong by the size of the corrections. If it takes both, you have double counted. Neither is acceptable in a report carrying assurance, and the fix is to keep the invoice-level record rather than a monthly summary.

Sites that change hands during the year

An acquisition, a disposal or a lease that starts in July puts a partial year into the boundary. The reporting rule has to say whether that site is in, out, or in for part of the year, and the consumption record has to be able to produce a part-year figure on demand.

We have written about the general shape of that work in getting utility data ready for assurance, and about the European angle for property portfolios in CSRD and building energy data.

What a Canadian company should do this quarter

1. Run the scope test on the current numbers, not the 2024 ones. Test the EU entity's turnover against the EUR 200 million subsidiary and branch threshold and the group against EUR 450 million, and write down the answer with the date you ran it.
2. If the answer is no, note what would change it. An acquisition or a good year in Europe can move a company back into scope, and the test is annual.
3. If the answer is yes or close, fix the consumption record now. The scope debate will be settled by lawyers; the data assembly will not be, and it is the long lead item.
4. Ask your assurance provider what evidence they will want for energy and emissions figures. Getting that answer before you design the collection saves a rebuild.
5. Keep the invoice-level detail. Every summary you can imagine can be rebuilt from invoices, and no invoice can be rebuilt from a summary.

There is a useful side effect to all of this. The consumption record that satisfies a European reporting requirement is the same record that answers what a site costs per square foot, which supplier contract is underperforming, and which building to retrofit first. Companies that treat the reporting work as a data project rather than a disclosure project tend to get those operational answers as well, from the same build. Those that treat it as a form to fill in do the work again next year.

Our view of the first cycle, and what tripped people up, is in lessons from the first CSRD reporting cycle.