CSRD Phase 2 enforcement begins in 2026 for companies that were not in scope for Phase 1. The readiness gap between what these companies currently report and what CSRD requires is, in many sectors, substantial enough to create material equity risk for investors who are not tracking it.
The sectors most exposed
Our analysis identifies 12 sectors where the combination of high CSRD reporting complexity, low current reporting maturity, and high exposure to the largest affected company cohort creates the most significant risk. The most exposed are industrial manufacturing, construction materials, agribusiness, and speciality chemicals — all sectors where supply chain emissions data collection is genuinely difficult and currently immature.
What enforcement looks like
CSRD enforcement is conducted by national regulators in each EU member state. The penalty structure varies, but material misstatements in sustainability reports carry financial penalties and — more importantly for listed companies — reputational risk that the market has historically discounted more heavily than the penalty itself.