CSRD Reporting in Czech Republic: Guide for Czech SMEs

Small and growing businesses (SMEs) across the Czech Republic are facing a wave of sustainability data requests from larger clients — particularly in the automotive supply chain, engineering, and IT services. Even if your business is not yet required to report under the Corporate Sustainability Reporting Directive (CSRD), many of your customers already are. Understanding what this means for you, and how to respond, is the first step.

This guide explains how CSRD applies in the Czech Republic, what the updated timelines mean for Czech businesses, and how voluntary frameworks — particularly the VSME Standard — give smaller organisations a practical, proportionate way to get started. Compliance does not need to be complicated or expensive when you know where to begin.

How CSRD Applies in the Czech Republic

The Czech Republic is an EU member state, so CSRD — formally Directive 2022/2464/EU — applies directly through national law. The Czech Republic transposed the directive into domestic legislation in 2024 via an amendment to the Accounting Act (zákon o účetnictví), which extended sustainability reporting obligations to large companies meeting the thresholds set out in the directive.

Czech businesses that meet at least two of the following three criteria in two consecutive financial years fall within the mandatory CSRD scope:

• More than 250 employees
• Annual turnover above €40 million
• Balance sheet total above €20 million

Most Czech SMEs sit below these thresholds and are not directly required to report. However, if you supply to large companies in Germany, Austria, or elsewhere in the EU — and those companies are reporting under CSRD — you are very likely to receive requests for your sustainability data as part of their value chain disclosures.

For a full breakdown of who must report and when, the CSRD for SMEs: The Complete 2025 Guide covers thresholds and obligations in plain language.

CSRD Timeline and Deadlines for Czech Businesses

The EU’s original rollout has been adjusted by the 2026 Omnibus package, which delayed reporting deadlines for most businesses. Here is where things stand:

Wave 1 — Large public-interest entities (PIEs) with over 500 employees These organisations began reporting for financial year 2024, with first reports published in 2025. This affects large Czech banks, insurers, and listed companies already subject to the older Non-Financial Reporting Directive (NFRD).

Wave 2 — Other large companies Originally scheduled for FY2025, this wave has been delayed to financial year 2027 under the Omnibus changes, with first reports due in 2028. This covers large Czech companies above the 250-employee threshold that were not already covered by NFRD.

Wave 3 — Listed SMEs on EU-regulated markets Originally scheduled for FY2026, this has been delayed to financial year 2028, with first reports due in 2029. A further opt-out to FY2030 remains under discussion.

Non-listed SMEs There is no mandatory reporting requirement for non-listed Czech SMEs. However, the voluntary VSME Standard (published by EFRAG in 2024) was designed precisely for this group and is already being used by businesses that want to respond to client requests and build early readiness.

For up-to-date country-by-country deadlines across the EU, see CSRD Deadlines by Country: Who Reports When (2026 Omnibus Update).

What This Means for Czech SMEs Not in Direct Scope

Even businesses that are nowhere near the CSRD size thresholds are feeling the effects. The directive requires large companies to disclose sustainability data across their entire value chain — which means they ask their suppliers, sub-contractors, and service providers to provide data too.

For Czech businesses, this pressure arrives most intensely from two directions. First, the German automotive and manufacturing sector: the Czech Republic is one of Germany’s largest trading partners, and the Czech automotive supply chain — which includes component manufacturers, engineering firms, and logistics providers serving Škoda, Volkswagen, Hyundai, and Toyota operations in the country — is heavily exposed to German CSRD requirements. Second, large Czech-based corporations, particularly in financial services and retail, that are now reporting under Wave 1 or will report under Wave 2.

A Czech engineering supplier with 60 employees may never file a CSRD report of its own. But if it supplies precision parts to a German Tier 1 manufacturer, that customer’s CSRD report will need to include Scope 3 emissions data — and that data has to come from somewhere.

How SMEs Can Handle Sustainability Data Requests from Large Clients explains what these requests typically look like and how to respond efficiently.

Which Czech Sectors Face the Earliest Pressure

Not all Czech businesses are equally exposed. The following sectors are most likely to receive sustainability data requests in the near term:

Automotive supply chain Czech manufacturers supplying Tier 1 or Tier 2 components to German and EU automotive groups are already seeing requests for emissions data, energy consumption figures, and workforce metrics. This is the single highest-pressure sector in the Czech economy for CSRD-related supply chain demands.

Mechanical engineering and industrial manufacturing Precision engineering, metalworking, and industrial equipment businesses that supply large EU manufacturers face the same dynamic. Clients in Germany, Austria, and the Netherlands are among the most active in requesting supplier sustainability data.

IT services and software Czech IT companies — including those providing software development, managed services, and outsourced development to large Western European clients — are increasingly being asked to complete ESG questionnaires. Workforce disclosures (diversity, pay, training) and business travel emissions are the most common areas of focus for this sector.

Professional services Legal, accounting, and advisory firms that serve large clients in the EU may be asked to align with their clients’ sustainability expectations, particularly around governance and ethical conduct.

How Czech SMEs Can Prepare

Preparing for CSRD does not have to mean hiring expensive consultants or implementing complex software. For most small and growing Czech businesses, the starting point is simple.

1. Understand whether you are in scope or in the value chain Use the employee, turnover, and balance sheet thresholds to confirm whether CSRD applies to you directly. If it does not, assess your customer base: which of your clients are large EU companies? Are they already reporting, or will they report from FY2027?

2. Start collecting basic data The most commonly requested data points are energy use (electricity and gas bills), greenhouse gas emissions (which can be calculated from energy and fuel consumption), workforce headcount, and any existing health and safety or anti-corruption policies. Most of this information already exists in your invoices, HR records, and utility accounts — it just needs to be gathered in one place.

3. Choose the VSME Basic Module as your starting point The VSME Standard — developed by EFRAG and published in 2024 — provides a clear, proportionate framework for non-listed SMEs. The Basic Module covers 11 key disclosures across environmental, social, and governance topics. It is designed to be completed without specialist knowledge and can be prepared alongside your annual accounts.

The VSME Basic Module Explained: What SMEs Actually Need to Report walks through each disclosure requirement in plain language.

4. Respond to client questionnaires with confidence When a large customer sends you a sustainability questionnaire, the VSME framework provides a ready-made structure for your answers. Responding in a consistent, documented format — rather than ad hoc — saves time and builds credibility with clients.

5. Consider what comes next Once you have your Basic Module in place, the VSME Comprehensive Module adds optional disclosures on topics such as biodiversity, circular economy, and value chain workers. These are only worth adding if your clients or investors are asking for them.

For manufacturing businesses specifically, VSME for Manufacturing SMEs: Simplified Sustainability Reporting provides worked examples and a practical starting checklist.

The VSME Standard: A Closer Look

The VSME Standard (Voluntary Sustainability Reporting Standard for SMEs) was published by EFRAG in 2024. It is separate from CSRD — it is not a legal requirement — but it was designed to align with the language and structure of ESRS (the European Sustainability Reporting Standards used by large companies under CSRD). This alignment means that data you collect for VSME is the same data your large clients need from you for their own CSRD reports.

The Basic Module covers:

• Energy use and greenhouse gas emissions (Scope 1 and Scope 2)
• Workforce composition, health and safety, and training
• Anti-corruption, bribery, and payment practices
• Basic information about your business, operations, and supply chain

There is no mandatory external assurance requirement for VSME reports. A well-structured internal report, clearly documenting your methodology and data sources, is sufficient for the vast majority of SME use cases.

To compare your options before committing, CSRD vs VSME: Which One Applies to My Business? is a useful decision-making guide.

Frequently Asked Questions

Is CSRD mandatory for Czech SMEs?

For most non-listed Czech SMEs, CSRD is not a direct legal requirement. The mandatory thresholds — more than 250 employees, over €40 million in turnover, or over €20 million in assets — exclude the majority of Czech small businesses. However, many Czech SMEs are feeling indirect pressure through their supply chains, as large EU clients now require sustainability data from their suppliers as part of their own CSRD disclosures.

When do Czech companies have to start reporting under CSRD?

Wave 1 companies (large public-interest entities with over 500 employees) began reporting for FY2024. Following the 2026 Omnibus delays, other large Czech companies above the 250-employee threshold now report from FY2027, with first reports in 2028. Listed Czech SMEs follow from FY2028, with reports in 2029. Non-listed SMEs have no mandatory deadline, but can use the voluntary VSME Standard at any time.

See the full EU timeline →

My German client is asking for sustainability data. What should I send?

The VSME Basic Module is the clearest way to respond to supply chain data requests from large EU clients. It covers the core metrics — energy, emissions, workforce, governance — in a format that maps directly to what your clients need for their Scope 3 disclosures. How to Respond to Large Clients’ CSRD Data Requests provides a practical guide to structuring your response.

Do Czech SMEs report in Czech or in English?

There is no language requirement in CSRD itself — reports can be prepared in any language. For domestic purposes, Czech is entirely appropriate. However, if you are responding to German, Austrian, or other EU clients, preparing your sustainability data summary in English (or the language of your client) will make it significantly easier to use. Many Czech businesses choose to maintain an internal Czech-language record alongside a shorter English-language supplier summary.

Key Terms

• CSRD — Corporate Sustainability Reporting Directive (EU 2022/2464): the EU regulation requiring large companies to report on environmental, social, and governance performance
• VSME — Voluntary Sustainability Reporting Standard for SMEs: a simplified, voluntary framework published by EFRAG in 2024 for non-listed small and medium-sized businesses
• ESRS — European Sustainability Reporting Standards: the detailed technical standards that large companies must follow under CSRD
• EFRAG — European Financial Reporting Advisory Group: the EU body that developed both the ESRS and the VSME Standard
• Scope 1 emissions — direct greenhouse gas emissions from sources owned or controlled by your business (e.g. company vehicles, on-site combustion)
• Scope 2 emissions — indirect emissions from purchased electricity or heat
• Scope 3 emissions — all other indirect emissions in your value chain, including those from suppliers and customers
• Double materiality — the CSRD requirement for large companies to assess both their impact on society and the environment, and sustainability risks to their financial performance
• Wave 1 / Wave 2 / Wave 3 — the phased rollout of CSRD reporting obligations across different company types and sizes

Conclusion: Getting Started

Czech SMEs are in a strong position to act now. The VSME Standard is available today, the data you need is already in your business, and the clients putting pressure on you will increasingly appreciate suppliers who can answer sustainability questions clearly and consistently.

Start with the VSME Basic Module, gather your energy and workforce data, and document your approach. Once you have done this once, maintaining it year on year becomes straightforward. With a clear structure and consistent effort, CSRD becomes an advantage rather than an obstacle — and for Czech businesses embedded in European supply chains, that advantage is very real.