CSRD Reporting

The Corporate Sustainability Reporting Directive (CSRD) brings sustainability reporting alongside traditional financial reporting as an equally important part of a company’s financial statements and annual report. This marks a significant shift, setting the course for the future of corporate reporting for companies of all sizes.

The European Sustainability Reporting Standards (ESRS), established under the CSRD, define the information that companies must report regarding the environmental, social, and governance-related sustainability impacts, risks, and opportunities they consider material. The European Commission has published two cross-cutting standards that apply to all companies within the scope of the directive, as well as ten topical standards. These topical standards are applied based on the company’s materiality assessment, regardless of the sector in which the company operates.

The Corporate Sustainability Reporting Directive (CSRD) is being implemented in phases. In the first phase, CSRD-compliant sustainability reporting applies to companies with over 500 employees that are already reporting under the Non-Financial Reporting Directive (NFRD), which was published in 2014. These companies have begun collecting data in accordance with the CSRD requirements for their 2024 financial statements.

In the second phase, the scope of the CSRD expands to include companies that meet at least two out of the following three criteria: more than 250 employees, a turnover exceeding €50 million, or a balance sheet total exceeding €25 million. These companies must begin data collection in accordance with the ESRS standards for their 2025 financial statements, meaning in practice from the beginning of 2025. The changes introduced by the directive will have a particularly significant impact on these newly covered companies entering the scope of sustainability reporting.

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The Omnibus Amendments Revise Reporting Requirements

In early 2025, the European Commission published the so-called Omnibus amendment proposal, which introduces clarifications and simplifications to the application of the ESRS standards—particularly for new reporters. Although the proposal has not yet been officially adopted, it is expected to enter into force during 2025 without changes.

According to the Omnibus proposal, the reporting obligation would, going forward, apply only to large companies with more than 1,000 employees. The reporting timeline would also be postponed, meaning that companies in the so-called second phase—those not yet reporting—would see their reporting obligations deferred by two years, to 2027. The Commission also aims to reduce the number of data points required under CSRD reporting, clarify the reporting process, and abandon the introduction of sector-specific standards.

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How Should a Company Proceed?

Companies with fewer than 1,000 employees should focus on building a business-driven sustainability strategy rather than prioritizing CSRD reporting. The focus should be on key sustainability themes that are relevant to the company’s core business and stakeholder expectations. These themes can be identified through a simplified double materiality analysis and related stakeholder engagement. with a double materiality analysis and related stakeholder engagement.

A company can assess the current state of its sustainability work and identify development needs using a free self-assessment form. with a self-assessment formThis practical tool from Käkikuu is based on the EU’s voluntary VSME sustainability reporting standard for SMEs and our extensive experience in supporting sustainability work in small and medium-sized enterprises.

Read more about the changing reporting requirements and their impact on SME sustainability work on Käkikuu’s blog.

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