What Is CSRD, and Why Is My EU Customer Asking About It?

Who this is for

Indian exporters — especially manufacturers and suppliers — who have received (or are worried about receiving) a sustainability data request from a European customer and don't know if it's mandatory, optional, or a trap.

Plain explanation

CSRD works almost exactly like BRSR's value-chain effect, just from the EU side. A EU-based company (or a non-EU company with substantial EU operations) that's in scope for CSRD has to report against a detailed standard called ESRS (European Sustainability Reporting Standards) — covering its own operations and, increasingly, its supply chain.

That means if you supply a company that's in scope for CSRD, they may ask you for:

• Your emissions data (especially anything that becomes part of their Scope 3).
• Labor and safety practices.
• Policies on ethics, anti-corruption, or human rights.

You are not filing CSRD. Your customer is. They're asking you for data because they need it to complete their report — the same relationship an Indian SME has with a BRSR-filing customer, just with a different regulator on the other end.

India specifics

You almost certainly don't file CSRD directly. CSRD applies to companies incorporated or with substantial operations in the EU — not to an Indian company simply because it exports there. Scope shrank sharply in 2026: the Omnibus I Directive (in force since 18 March 2026) raised the thresholds to 1,000+ employees and €450 million+ net turnover, cutting the in-scope population by an estimated ~90% — from roughly 50,000 companies down to roughly 5,000, mostly large EU-based entities and non-EU companies with a significant EU presence (large subsidiaries or branches).

One protection worth knowing about: EU rules include a "value chain cap" — a CSRD-filing company is not legally allowed to demand more sustainability data from its value-chain suppliers (including you) than what's covered by a lighter, voluntary standard designed for smaller companies. If a questionnaire you receive seems to be asking for far more than that — full ESRS-level detail, audited assurance, page after page of disclosures — it's fair to push back and ask why, since EU law itself doesn't require your customer to demand that much from you.

Why it's showing up now: EU buyers are increasingly using supplier sustainability data as a factor in sourcing decisions, not just a compliance checkbox. Indian exporters who can produce clean, credible data are reported to be securing better terms and longer contracts than competitors who can't — this is becoming a competitive factor, not only a compliance one.

Worked example

Deepak Auto Components in Pune exports brake parts to a German auto-parts distributor. The distributor is a mid-sized EU company now in scope for CSRD. In early 2026, Deepak receives an email: a spreadsheet asking for his factory's electricity source mix, water usage, and a description of his labor safety policy.

Deepak isn't filing anything with the EU. But his distributor needs this data — specifically the emissions figures — to calculate their own Scope 3 footprint for their CSRD report. Because Deepak already tracks similar data for his BRSR-filing Indian customers (see our BRSR guide), he's able to reuse most of the same numbers, just reformatted into the distributor's spreadsheet.

Checklist

• Confirm CSRD does not apply to you directly — it almost certainly doesn't unless you have significant EU-incorporated operations.
• If a EU customer sends a questionnaire, ask which standard it's based on (full ESRS vs. the lighter voluntary SME standard) — you're only obligated to answer at the SME-standard level.
• Reuse data you already track for BRSR or other customer questionnaires — emissions, safety, and policy data usually overlaps across all of these requests.
• Treat a clean, fast response as a competitive advantage with EU buyers, not just a compliance chore.
• Re-confirm your customer's CSRD status periodically — EU scope and thresholds have changed multiple times since the directive was introduced, most recently in the July 2026 revision.

What to do next

If you haven't already, check whether you're also directly in scope for India's own version of this — BRSR.

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Current as of: 22 July 2026, reflecting the European Commission's July 2026 ESRS revision. EU sustainability reporting scope and standards have changed more than once since CSRD was introduced — treat any date here more than 12 months old as due for a recheck.

Sources:

• European Commission — Corporate sustainability reporting
• European Commission — Revised sustainability reporting standards (Jul 2026)