CSRD and Double Materiality for HR Departments: What You Need to Report by 2026 The Corporate Sustainability Reporting Directive (CSRD) has fundamentally changed the scope of sustainability reporting in the European Union — and HR departments are squarely in the spotlight. For the first time, workforce data is not a voluntary add-on to a sustainability report: it is a mandatory, auditable disclosure governed by specific European standards. Understanding double materiality is no longer the preserve of ESG consultants; it is now a core competency for any HR director operating in a CSRD-in-scope organisation. KEY TERM — Double Materiality: Under the CSRD framework (Directive 2022/2464/EU), double materiality requires companies to assess sustainability matters from two angles simultaneously: impact materiality (the actual or potential impacts of the company's activities on people and the environment) and financial materiality (how sustainability matters create financial risks or opportunities for the company). A topic is material if it meets either threshold — not necessarily both. 50,000+"More than 50,000 companies across the EU will fall under CSRD scope by 2028 — a tenfold increase compared to the previous NFRD framework. The majority will face mandatory ESRS S1 workforce reporting for the first time."— European Commission, CSRD Impact Assessment, 2023 Who must report, and when The CSRD rollout is phased. Understanding which wave applies to your organisation is the first step for HR planning: WaveFirst reporting yearPublication deadlineCompanies in scopeWave 1FY 20242025Large listed companies (previously under NFRD)Wave 2FY 20252026Other large companies (>500 employees, or >€40M turnover + >€20M balance sheet)Wave 3FY 20262027Listed SMEs (with opt-out until 2028)Wave 4FY 20282029Non-EU companies with significant EU revenue (>€150M) If your company falls under Wave 2, the first year for which you must collect and report ESRS-compliant workforce data is financial year 2025, published in early 2026. That means HR data collection systems need to be operational now — not next year. ESRS S1: Own Workforce — What HR must disclose The European Sustainability Reporting Standard ESRS S1 (Own Workforce) is the standard that HR departments will live and breathe under CSRD. It covers the company's own employees and non-employee workers (contractors, agency workers) under the company's control. The required disclosures fall into several categories: Governance and policies (ESRS S1-1 to S1-4) Policies related to own workforce (including freedom of association, collective bargaining, non-discrimination) Processes for engagement with workers and workers' representatives Processes to remediate negative impacts and provide channels for raising concerns Targets related to managing material impacts and risks on own workforce Metrics and data points (ESRS S1-6 to S1-17) Headcount: total employees by gender, country (if >10% of workforce in one country), contract type (permanent vs. temporary), full-time vs. part-time Turnover: employee turnover rate and number of leavers Gender pay gap: total remuneration ratio between female and male employees CEO pay ratio: ratio of CEO annual total compensation to median employee annual total compensation Health and safety: fatalities, lost-time injury rate, recordable incidents, number of days lost Training: average hours of training per employee per year, by gender Collective bargaining: percentage of own workers covered by collective bargaining agreements, by country Conducting the double materiality assessment: an HR perspective The double materiality assessment (DMA) is the analytical foundation of any CSRD report. For HR, this means examining your workforce practices from both directions: Impact materiality (inside-out view): How do your HR policies and practices affect your employees and broader society? This includes assessing whether your hiring practices create barriers for marginalised groups, whether your supply chain workers face forced labour risks, whether your restructuring practices cause economic harm to communities, and whether your health and safety management prevents injury and illness. Financial materiality (outside-in view): How do workforce-related sustainability topics create financial risks or opportunities for your company? High employee turnover increases recruitment and training costs. Poor mental health management raises absenteeism and reduces productivity. Non-compliance with pay transparency legislation (Directive 2023/970/EU) creates legal and reputational risk. Skills gaps in critical roles represent a strategic threat. How IgeraRegTech automates ESRS S1 data collectionHR Director asks:"We have 620 employees across 4 EU countries. How do I collect gender pay gap data for ESRS S1-16 without manually pulling from 4 different HRIS systems?"IgeraRegTech responds:"IgeraRegTech connects to your HRIS systems via API and automatically consolidates remuneration data by gender, country, and employment type. It calculates the unadjusted gender pay gap as required by ESRS S1-16 and flags any data gaps that require manual verification. Output is pre-formatted for the ESRS digital tagging taxonomy (XBRL iXBRL). Estimated time saving: 80% vs. manual collection." The gender pay gap reporting intersection From 2026, CSRD S1 disclosures overlap significantly with the EU Pay Transparency Directive (Directive 2023/970/EU), which requires companies with 150+ employees to report the gender pay gap annually from June 2027. HR departments must plan for both reporting frameworks simultaneously: ESRS S1-16 requires the total remuneration ratio (female to male) for all employees. The Pay Transparency Directive requires reporting by pay category and job category. Both use different methodologies — collecting data that satisfies both standards simultaneously reduces duplication. IgeraRegTech maps data collection templates to both frameworks, eliminating double data entry. Health and safety data: the ESRS S1 requirements in detail Health and safety is one of the most data-intensive areas of ESRS S1 for HR. The standard (ESRS S1-14) requires reporting on: Fatalities as a result of work-related injuries and ill health (both employees and non-employees) Lost-time injury rate (number of recordable work-related injuries per million hours worked) Recordable work-related incidents Number of days lost due to work-related injuries or ill health Whether the company has a system for monitoring, detecting, and addressing work-related ill health For companies operating across multiple EU countries, this data must be aggregated from potentially different national reporting systems (Spain's Seguridad Social, Germany's DGUV, France's CNAMTS). Automation is not a luxury — it is a practical necessity. Is your HR team ready for ESRS S1 reporting in 2026?IgeraRegTech automates ESRS S1 data collection across your HRIS systems, pre-formats outputs for XBRL tagging, and keeps you audit-ready with full data lineage documentation.Book a free 30-minute CSRD readiness assessment Key takeaways: CSRD double materiality for HRDouble materiality requires assessing both impact on people (inside-out) and financial risk from workforce issues (outside-in)ESRS S1 covers own employees and non-employee workers under company controlWave 2 companies (large non-listed) must report on FY 2025 data — collection must begin nowKey HR metrics: headcount by gender/country, turnover rate, gender pay gap, CEO pay ratio, lost-time injury rate, training hoursESRS S1 overlaps with the EU Pay Transparency Directive — plan both reporting frameworks together to avoid duplication Frequently asked questions: CSRD and HR reporting Does CSRD apply to non-EU companies with European subsidiaries? Yes, under Wave 4 (from FY 2028): non-EU companies with net turnover above €150 million in the EU and at least one large or listed subsidiary or branch in the EU will need to report. The parent company must produce a group-level sustainability report aligned with ESRS, or an equivalent standard deemed equivalent by the European Commission. What is the difference between ESRS S1 (Own Workforce) and ESRS S2 (Workers in the Value Chain)? ESRS S1 covers employees and non-employee workers under direct control of the reporting company (your own staff and on-site contractors). ESRS S2 covers workers in the upstream and downstream value chain — suppliers' workers, for example. For HR departments, S1 is the immediate priority; S2 requires supply chain due diligence processes that typically involve Procurement and Legal as well. Are SMEs exempt from CSRD? Unlisted SMEs are not in scope under the current phased rollout. However, they may face indirect pressure through their large listed clients, who must report on their supply chain (ESRS S2). The Commission has developed a voluntary standard for SMEs (VSME ESRS) to help smaller companies provide data to larger clients without the full burden of mandatory CSRD compliance. Who is responsible for CSRD reporting in the company — HR or Finance? CSRD cuts across functions. The sustainability report must be included in the management report (Directors' Report), making Finance and the Board ultimately accountable. However, the data collection for ESRS S1 metrics sits squarely in HR's domain. Best practice is to establish a cross-functional CSRD working group led by a Chief Sustainability Officer or equivalent, with HR owning all S1 data points. What does "limited assurance" mean for HR data under CSRD? CSRD requires third-party assurance of sustainability disclosures. In the first phase (Waves 1 and 2), the required level is "limited assurance" — the auditor confirms that nothing has come to their attention indicating the information is materially misstated. This is less rigorous than the "reasonable assurance" applied to financial statements, but still requires HR data to be traceable, documented, and consistent. By 2028, the Commission may raise the bar to reasonable assurance for some disclosures. Can we use our existing HRIS data for ESRS S1 without changes? In most cases, partially. Existing HRIS systems typically capture headcount, contract type, and basic demographic data. However, the specific breakdowns required by ESRS S1 — particularly gender pay gap by job category, collective bargaining coverage by country, and non-employee worker data — often require additional data collection or system configuration. A gap analysis against the ESRS S1 data points is the essential first step. Stop managing CSRD compliance in spreadsheetsIgeraRegTech integrates with your existing HRIS, automates ESRS S1 data collection, and produces audit-ready reports with full data lineage — so your HR team can focus on people, not compliance paperwork.Book a free 30-minute CSRD readiness assessment Last updated: June 2026 | Author: IgeraSolutions Team | Sources: Directive 2022/2464/EU (CSRD), ESRS S1 Own Workforce (EFRAG, 2023), Directive 2023/970/EU (Pay Transparency), European Commission CSRD Impact Assessment 2023 | IgeraRegTech — book a free assessment.
