Everything your business needs to know about CSRD Everything your business needs to know about CSRD

CSRD requirements

CHALLENGES

TOPICS

CSRD Requirements

The EU first cemented its position at the frontline of the fight against climate in 2008 when EU leaders agreed that by 2020 the EU would cut its greenhouse gas emissions by 20 per cent from the 1990 level - a goal it achieved three years ahead of schedule.

Conclusion

CSRD Requirements

CHALLENGES

As the EU now aims to reduce CO2 emissions by 55 per cent by 2030 and be climate neutral by 2050, the CSRD is an essential enabling pillar for the next phase of the continent’s decarbonisation efforts.

Small undertakings

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Conclusion

While the reporting requirements may seem daunting, the structured and business-specific approach to sustainability reporting unlocked by the CSRD should help companies improve their performance while enhancing their reputation among investors, stakeholders, and consumers. Meanwhile, investors should benefit from comparable data that makes it easier for them to identify which corporates and industries are most likely to prosper in an economy that is transitioning towards net zero emissions.

“Zooming out, I would say the CSRD is not just important for businesses, but in general for the whole region,” says Dr Alex Schmidt. “It really puts the EU at the forefront of global climate regulation policy action, and that’s really important.”

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In December 2019 the European Commission announced the European Green Deal, setting out the core strategy for delivering on the bloc’s goal of achieving ‘climate neutrality’ by 2050. The Green Deal seeks to tackle the threat of climate change, at the same time as growing the economy, creating jobs, enhancing energy security, and ensuring European competitiveness.

The Green Deal is underpinned by EU Climate Law, which puts the bloc’s 2050 net zero goal on a legislative footing. The framework provided by this headline legislation has triggered a wave of new directives designed to ensure emissions fall in line with the interim goals set by Brussels. One of the main pillars of this decarbonisation effort is the introduction of the Corporate Sustainability Reporting Directive (CSRD), which sets out new rules governing how businesses should report on their environmental performance and the risks and opportunities they are facing.

Reporting in Fiscal year

A survey from ESG-focused Software as a Service (SaaS) provider EcoOnline found that while 100 per cent of businesses in scope stated they are committed to CSRD compliance, 63 per cent of mid-market organisations said they are struggling to prepare for the new rules.

Its research claimed 60 per cent of enterprise organisations - defined as those with more than €1bn in annual revenue - are further along in their preparations, stating they are ‘almost ready’ and have the right tools and solutions in place to comply with the directive. But just 37 per cent of mid-market businesses said the same.

While mid-market businesses have been given longer to prepare, EcoOnline warns these organisations need more support to scale up their CSRD compliance efforts. Standout areas where mid-market respondents claimed they needed further support were data collection, greenhouse gas (GHG) accounting, and drafting EU CSRD reports.

As such, for mid-market businesses with relatively immature ESG data reporting and collection practices, meeting the new requirements could become a daunting, costly, and time-consuming experience.

The deadlines for companies to report under the CSRD’s requirements will depend on their size, as classified by the EU as small, medium, or large undertakings under the following definitions:

The new requirements under the CSRD replace the existing Non-Financial Reporting Directive (NFRD). The two directives are similar, but the scope of the CSRD is significantly broader - both in terms of data required, and who needs to report.

In January 2025, the first wave of more than 50,000 companies subject to the CSRD will face their first reporting deadline based on the 2024 financial year.

Introduction

The CSRD serves as a pioneering model for sustainability disclosures on a global scale, and it is highly likely that further regulations on environmental reporting and monitoring will be introduced and extended over time.

While the CSRD is an EU directive, there will be UK businesses in scope. Even for UK businesses that fall outside the scope of the CSRD, recognising the broader implications of the regulations will be crucial.

Exclusively available to BusinessGreen Intelligence members, our latest whitepaper breaks down the challenges and opportunities posed by new Corporate Sustainability Reporting Directive requirements.

While the NFRD only applied to large public-interest entities - defined by the EU Accounting Directive as organisations with more than 500 employees - the CSRD will phase in smaller and non-EU companies between 2024 and 2028.

Under the Directive, companies in scope will have to disclose detailed reports covering thousands of data points spanning the risks and opportunities arising from social and environmental issues, as well as the impact of their business activities on people and planet.

The CSRD aims to help investors, civil society organisations, consumers and stakeholders fairly evaluate the sustainability performance of businesses and assess how well-prepared companies are the changes that are coming through the Green Deal and the wider global push to reach net zero emissions.

Carbon accounting specialist Greenly has developed a useful chart, detailing the deadlines for the different reporting requirements:

The Directive will be phased in gradually, with more time offered to organisations not currently falling under the scope of NFRD to allow them a grace period to prepare for the rigorous reporting processes.

By expanding the scope of the NFRD, the CSRD incorporates new requirements for more comprehensive reporting that encompass all of a company’s impacts, spanning more than 1,500 data points across the three spheres of environment, social, and governance.

Companies within scope will have to report according to European Sustainability Reporting Standards (ESRS) and include detailed reports on the following key data points:

Additional information that should feature in reports include water and biodiversity impacts, circular economy metrics, executive compensation policies, gender pay gap data, and multiple other key performance indicators. Again, Greenly has a useful summary of the main data points covered by the directive:

Greenhouse gas (GHG) emissions Scopes 1, 2, and 3 Transition plans Energy consumption by source Waste production volume Average hours of training by employee category and gender Percentage of each gender in each governing body and the percentage of women on the board of directors

Everything your business needs to know about CSRD

PPAs play an important role in incentivising the construction of new clean energy projects by providing long-term price predictability and security

Under the CSRD, companies will have to complete a Double Materiality Assessment (DMA). This is a new approach to sustainability reporting, where companies will consider how their business impacts the environment and people, as well as how these affect the company’s financial value.

Double Materiality Assessment

However, crucially, not every company has to report on every one of the more than 1,500 data points. First, they have to determine which metrics and risks are material to their organisation.

However, the rules mean companies need to engage stakeholders affected by their activities to help with the assessment. This could include those directly impacted by the business, as well as those who can testify to the consequences of the businesses’ wider activities.

By assessing both impact materiality - how a firm’s business activities impact people and the planet, both positively and negatively - and financial materiality - how these impacts create financial risks and opportunities - businesses should be able to better understand their relationship with the world around them and how they can improve performance.

“This dual focus is designed to give stakeholders, including investors and regulators, a comprehensive view of a company's sustainability performance, but also to help companies identify what is materially relevant for them to report on,” explains Richard Eyram, chief customer officer at sustainability ratings and insight platform EcoVadis. “The CSRD’s ‘double materiality’ approach holds companies accountable for their direct and indirect impacts on society and the environment, which can drive more responsible business practices.”

Why was the CSRD introduced?

The Directive aims to improve and standardise Environmental, Social, and Governance (ESG) reporting for companies in scope both in the EU and beyond. The intention is to provide boards, investors, and other stakeholders with detailed, consistent, and comparable ESG data which will offer improved transparency on a global scale, which should in turn help more firms transition towards more sustainable business models.

Companies which fall under the scope of the CSRD will also have to report under its sister directive - the EU’s Corporate Sustainability Due Diligence Directive (CSDDD). While the CSRD focuses on reporting and transparency, the CSDDD focuses on due diligence, where companies must conduct human rights and environmental due diligence (HREDD) to identify sustainability impacts in their supply chains.

Under CSDDD companies will be required to set up due diligence processes, including creating a due diligence policy, as well as identifying and evaluating risks, and implementing prevention plans and mitigation strategies.

There is considerable overlap between the two directives, given the CSRD expects companies to report on environmental and social impacts in their supply chains.

The wide and detailed requirements imposed by the CSRD could pose challenges for some smaller enterprises not yet fully versed in the complex landscape of data reporting.

Preparing your data

Challenges

However, sustainability reporting best practices are increasingly well-established, providing growing evidence that effective reporting can unlock cost-savings and improved financial and environmental performance. Previous examples of demanding corporate reporting regimes, such as France’s Duty of Care Law, the UK’s Modern Slavery Act, and Germany’s Supply Chain Due Diligence Act Lieferkettengesetzes (LkSG), show that many firms can successfully advance their ESG data maturity to comply with new requirements.

Meanwhile, given the extensive data requirements, companies of all sizes could face challenges in gathering reliable and accurate data from every supplier, especially in complex global supply chains.

“For our customers the data reporting requirements are hugely daunting, often their supply chains will be large and complex with long value chains and numerous stakeholders involved, so ensuring they have the support and transparency that they require from all of their suppliers is a huge challenge,” says Josh Pittman, managing director of sustainable packaging firm Priory Direct - a certified B Corp supplying sustainable packaging to thousands of retailers including Vivobarefoot, Hotel Chocolat, Moonpig and Lucy & Yak. “We have found in our own supply chain that it can be hard to pin down the information you need, not because these suppliers are unwilling, but because they don’t always understand how and what to record, so there can be an element of educating your supply chain before you can meet requirements.”

Fines and penalties for non-compliance

Companies which fall short of the disclosure requirements could face substantial fines and penalties, which in turn could severely impact their financial health and market position.

With an increasing focus on ESG considerations, the UK government is planning its own framework to create a UK Sustainability Reporting Standards (UK SRS) which will be based on the global corporate reporting baseline of IFRS Sustainability Disclosure Standards. The eventual rules are likely to have a lot of similarities to the CSRD.

Whether in scope or not, the sooner businesses can embrace and adapt to the evolving regulatory landscape, the better equipped they will be to navigate the sustainability expectations of investors, policymakers, and consumers, future proofing their business models in the process.

“There’s no business on a dead planet,” says Ecosia’s Dembinski. “We need to completely shift our economy away from being an old extractive fossil fuel led economy to a regenerative one. The cost of doing that is so much less than the cost of what we’re facing with complete economic and planetary destruction. We can still do good business and create a thriving planet if we start the shift right now, and these regulations are key for doing that.”

Case Study: Louise Koch, group head of Danish water technology firm Grundfos

A majority of companies will need to report as soon as 2025

Corporate

Utility

Unknown/Other

CAGR

2.52

0.87

5.06

2.83

3.06

3.34

5.19

7.99

1.96

9.31

4.02

11.95

16.20

11.45

13.30

6.59

7.98

3.39

2018

2019

2020

2021

2022

2023

+37%

Source: PexaQuote, PPA Tracker Note:'Other' mostly refers to electrolyser developers

We have found in our own supply chain that it can be hard to pin down the information you need, not because these suppliers are unwilling, but because they don’t always understand how and what to record

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This sets the stage for a transformation that supports long-term value creation and future-ready business models.

What’s important is that the content of these laws is good. We want to maintain it, and we will maintain it.

Ursula von der Leyen , European Commission President

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This whitepaper explores the CSRD’s reporting requirements, how businesses should prepare for upcoming deadlines, and the challenges and opportunities this mammoth reporting requirement presents.

Those with fewer than 50 employees, and less than €4m on their balance sheet, or €8m net turnover.

Those with more than 50 employees but less than 250, and with between €4m and €20m on their balance sheet, or between €8m and €40m net turnover.

Medium undertakings

Those with more than 250 employees and with more than €20m on their balance sheet, or more than €40m net turnover.

Large undertakings

Who needs to report, and when?

Source: Greenly

A well-defined timeline extrending to SMBs

Source: By European People's Party - EPP Lead Candidate Multimedia Content

Explaining the European sustainability reporting system (ESRS) by EFRAG

CSRD lists 1564 data points divided into three categories

Qualitative Environmental risks mitigation policy, Mobility plan, Skills management, etc.

Quantitative GHG Emissions, Reduction target, Biodiversity impact, Wastes, etc.

Quantitative Average Seniority, Gender pay Gap, Professional quality index, etc

Qualitative Suppliers policy, gender policy, Accessibility of tooks to disabled people, etc

Quantitative % of turnover integrating CSR, % of independent admins, etc.

Qualitative CSR labels, Executive compensation policy, Purposes in the status, etc

KPIs

If companies have to disclose on their environmental performance using comparable metrics, pressure will increase on them to improve those metrics, in theory at least.

“The CSRD improves transparency around corporate sustainability practices,” Eyram says. “This gives stakeholders, investors and customers access to clear, consistent insights, enabling more informed decision-making.”

Moreover, by establishing a uniform legal framework across the EU, it is hoped the CSRD will create a level playing field for companies operating within the single market. And if other jurisdictions emulate the EU’s approach it could become a de facto global standard for sustainability reporting, leading to improved environmental performance from corporates worldwide.

While compliance with the CSRD will be demanding, many experts agree it is a necessary improvement on previous ESG reporting practices that tended to vary massively in their quality and reach.

“ESG reporting was all over the place,” says Alexis Normand, chief executive of carbon accounting platform Greenly. “What the CSRD directive has essentially done is standardise this for everybody. It’s an effort to have a common metric for all EU companies and ESG standards, with a reporting system which will allow whoever wants to look at it to compare apples with apples, and oranges with oranges.”

How does the CSRD relate to the CSDDD?

“Both directives require companies to assess and disclose the sustainability risks and impacts of their supply chains,” explains Normand. “For instance, the CSRD requires disclosure of Scope 3 emissions and human rights impacts within a company’s value chain, which aligns with the due diligence obligations set out by the CSDDD. Companies will need to collect similar data for compliance with both directives, such as environmental metrics, human rights violations, and governance practices.”

What does this mean for the UK?

Any UK businesses with a subsidiary of 250 employees, or more than €40m in turnover in the EU or €20m on its balance sheet will be subject to the CSRD. The rules are expected to bring in the region of 1,500 UK-based businesses into scope.

“There will be quite a few UK companies that will have to report under CSRD either because they have securities listed on the EU regulated market, or because they meet the threshold and have a subsidiary branch within the EU so they will face the same implications that other companies that fall within the scope will face as well,” explains Veronkia Theime head of delivery for Europe at Carbon Trust.

Theime adds even firms in the UK which do not fall within scope will still be affected if their customers or suppliers have to report under the CSRD or the CSDDD.

“I think that companies that don’t necessarily directly need to report under the CSRD obviously don’t need to do the full spectrum, but if for example they are a supplier of a customer who is affected by a company who is affected by the CSRD, then that customer will need to report on their entire value chain,” she adds. “That includes their suppliers, so they might be asking their suppliers for more information and more transparency.”

Any business with a large supply chain is likely to be impacted by the new rules, either directly or indirectly.

“Compliance may be more manageable than initially anticipated,” explains Eyram. “These new laws are also remodelled around international standards like the Global Reporting Initiative (GRI), UN Global Compact, and the Organisation for Economic Cooperation and Development (OECD) principles, which multinational companies have followed for years, making compliance feel natural.”

While the CSRD does not directly specify fines for non-compliance, member states are required to enact the directive and many have chosen to do so through amendments to existing corporate reporting and auditing laws, which have raised the prospect of significant penalties for firms that fail to comply. For example, the CSRD in Germany is entered into national law through amendments to the Commercial Code, Stock Corporation Act, Securities Trading Act, and the professional regulations of auditing processes.

In practice this means fines and penalties will be defined separately for each EU member state, and they can broadly be expected to be in line with current penalties for failing to submit annual financial reports.

“Non-compliance carries significant legal and financial risks, as failure to meet the standards could result in penalties or other financial consequences,” warns Eyram. “This makes it crucial for companies to develop robust compliance strategies to ensure they are well-prepared to align with these new regulatory expectations and maintain their standing in increasingly sustainability-focused markets.”

Carbon Trust’s Theime warns pressure is mounting on businesses to demonstrate compliance with the new rules. “There’s definitely anxieties about it,” she says. “All of this comes with the risk of penalties, which aren’t clear yet depending on which member state you will operate in, and that obviously adds to the anxiety.”

Plus, CSRD reporting should help minimise reputational risks that are becoming ever more severe for many businesses. “Consumers will want to see what you’re doing,” says Sophie Dembinski, head of public policy at CO2 neutral search engine Ecosia. “People think [consumers] don’t engage with that kind of material, but from our research we can see that they do.”

“It’s a competitive advantage,” says Dr Schmidt. “That’s going to be the mindset of the future. Sustainability should literally be the ability of your business to sustain itself in the future, so that’s important for companies to recognise.”

As well as managing risk, when businesses implement long-term strategies off the back of CSRD reports, it should help future proof their business models and ensure they remain competitive in markets that are changing rapidly as a result of climate impacts and the clean energy transition.

Mindset of the future

“It’s often perceived as a reporting burden and a cost,” adds Dr Alex Schmidt, head of science, sustainability, and climate research at carbon accounting firm Normative. “I would really encourage businesses to shift from a cost mindset to an investment mindset. It’s not like these costs are gone - it’s investing, and the return is regulatory compliance.”

“Essentially it is about qualifying the cost and the return on investment for preparing for the energy transition,” says Greenly’s Normand. “People react to risk, more than they react to wins. If you’re able to quantify that risk, which is essentially the cost to the business, then you will get people to start changing their habits.”

Businesses should also be viewing the CSRD as an investment in their future, and a way to mitigate future risks.

“Directives such as this are keeping sustainability firmly at the top of business agendas,” Pittman adds. “Over time this will mean it becomes an embedded part of the business model, rather than an add-on to be offset.”

Moreover, the CSRD will encourage better sustainability practices overall as well as improved stakeholder trust.

Not a cost, an investment

“Whilst some businesses do this of their own accord, unfortunately the majority need a regulatory push.”

Priory Direct’s Pittman agrees that as a framework the CSRD will be “worthwhile and impactful”. “Ultimately, we’re strong believers in ‘what’s measured is managed’,” he says. “Like many things, it is short-term pain, for long-term gain, and ultimately companies have to take responsibility for understanding, measuring, and reducing the impact of their businesses on our planet,” he adds.

The availability of multiple ESG data points should also make it easier for companies to execute their net zero and nature initiatives.

“With these new frameworks in place, businesses can shift from simple compliance to driving positive impact,” he says. “This sets the stage for a transformation that supports long-term value creation and future-ready business models.”

“The introduction of CSRD provides the opportunity to level the playing field across the EU and beyond, harmonising due diligence requirements and aligning expectations for suppliers,” says Eyram. He adds this standardisation lays the groundwork for greater industry collaboration, fostering a pre-competitive environment where companies can work together on sector-wide initiatives to create sustainable supply chains.

The comparable nature of CSRD reporting also allows businesses and investors to better gauge how they are performing compared to peers.

By identifying risks through materiality assessments, businesses have the chance to tackle those risks before they result in significant impacts, providing a mechanism for enhancing long-term business resilience.

While reporting requirements may appear daunting, the CSRD should be viewed as an opportunity rather than a burden, experts argue.

Short-term pain for long-term gain

Opportunities

The best way companies can get ready for the CSRD is to start informing themselves as soon as possible about the processes and requirements involved to ensure compliance, while examining their current reporting processes and sustainability impacts.

Forewarned is forearmed

Advice

“My advice to companies is to look at all your functions,” says Normand, adding that such a review should include everything from the chief executive to the HR and marketing departments.

Dr Alex Schmidt agrees. “First and foremost, I’m always a fan of getting informed before taking any action,” he says. “I wouldn’t rush off and get a consultant in - I would say let’s inform ourselves. What are the basics I need to know, and what applies to my organisation? Then you at least know what’s coming at you.”

“It’s about using this as an opportunity to demonstrate value for the different functions of your business in an age where this has become the top of everybody’s mind, because climate change is no longer an abstract problem, it’s here and now,” he adds.

“This needs to include individuals from across different departments and training them up on the CSRD, and almost having them be CSRD champions across the business to make sure the right amount of information is being collected,” says Theime.

Getting CSRD-ready will require cross departmental collaboration across an organisation, which can be difficult to engineer. The Carbon Trust has seen companies setting up dedicated CSRD departments and teams to better facilitate co-operation between different parts of a business.

“The first year is always the hardest because you don’t have the data,” he adds. “But once you’ve done it once, you know how it works. It’s about getting started now, because you have to prepare.”

For those with reports due in 2026 or 2027, Dr Schmidt advises companies to start gathering the information they need at least one full calendar year ahead of the deadline.

Cross departmental collaboration

Invest in tech

Companies may also look to invest in advanced systems and processes for ESG data collection, tracking and reporting. This could include centralised platforms as well as AI driven tools, which can help businesses comply by ensuring the accuracy and reliability of data from various sources.

Louise Koch: As a Danish and privately owned company, and a large company with 20,000 employees worldwide, we will be in scope for the CSRD from the fiscal year of 2025.

BusinessGreen Intelligence: Will you be reporting on CSRD?

We have one year to go, so we can look at the best practice from others. That being said, we are of course well underway with our preparations. We started in May 2024, and started by understanding more specifically what the requirements are and how we are in scope.

How are you preparing?

The DMA also determines which topics are material, and therefore in scope for us to report on. There are more than 1,500 data points in the CSRD, so not all companies are required to report on all of them.

How did you do the Double Materiality Assessment (DMA)?

The DMA is important for two reasons. Firstly, it’s a really good strategic exercise. Secondly, when you know you have a risk you can define your strategy based on that.

Based on our materiality assessment, there were around 700 data points where we were in scope.

Following that we did a gap analysis looking into all these topics in scope, and the requirements for each. From there we considered our readiness by asking whether we had that data and whether we had the right policies in place.

How are you finding it?

It’s definitely a lot of work, and it’s a lot of extra work compared to what most companies have been doing before. It’s not just about collecting one data point, so it’s not like changing a lightbulb, it’s like completely re-wiring a house.

I think before we call it a burden, we need to look at the vision. The vision of the European Union is to build a carbon neutral economy, and they know they need to move capital and investments towards more green, sustainable, and ethical companies.

What are the advantages?

In order for investors to do that, they need much more transparency on how companies are performing and what they are doing in their supply chains, and they need that in a way that’s comparable.

Previously sustainability reporting has been a genre with many variations, whereas now there is a framework. I think the vision and the attention really outweighs a lot of the extra work, because it’s so important that we get this visibility and its benchmarks.

What’s your advice?

I think it’s important for companies to first of all talk to their customers, talk to their International Organisation of Standardisation (ISO), and understand how they are in scope.

I think in these first years good enough is good enough. If you look at the minimum compliance level, it’s actually quite minimal. And be aware of data point panic, and don’t panic too much.

Sustainability is a team sport. This is not something that a small team can do. This is an exercise that really involves the entire company, and therefore needs some programme management. But everybody has a role to play, and everybody has a responsibility in the company when it comes to sustainability.

2024

2025

2026

2027

2028

Companies previously subject to the NFRD (large listed companies, large banks and large insurance undertakings)

More than 500 employees Turnover that exceeds €40 million and/or balance sheet that exceeds €20 million

More than 250 employees Turnover that exceeds €40 million Balance sheet that exceeds €20 million

Other large EU and non-EU companies (listed or not listed):

More than 250 employees Turnover that exceeds €40 million Balance sheet that exceeds €20 million

SMEs listed on EU regulated markets: All SMEs - European or non-European

Option to opt-out for 2 years

Other large non-EU groups Third-country groups with an EU turnover that exceeds €150 million and with a large branch or subsidiary in the EU

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OPPORTUNITIES

Case StudY: GRUNDFOS

Case Study: GRUNDFOS

ADVICE

Legislative uncertainty

In a bid to reduce red tape and streamline the reporting processes required by its three new reporting frameworks, the EU has announced it is to examine CSRD alongside CSDDD and the EU Taxonomy in an ‘Omnibus Simplification Package’ with a view to streamlining reporting obligations, reduce administrative burdens, and better align existing sustainability reporting obligations.

While streamlined reporting processes may be welcome for some, initial responses to the proposed omnibus package indicate businesses are frustrated at being faced with yet more regulatory uncertainty at a crucial time when they are readying their data collection processes for compliance with the new directives.

The Commission said it is working towards a target to reduce reporting requirements by at least 25 per cent by mid-2025, which coincides with when many companies will be preparing their first rounds of CSRD data.

While details of what this could entail and mean for businesses’ reporting requirements remains unclear, Von der Leyen stressed the objective is to streamline the reporting processes while maintaining the overall objective of the original legislative drive.

“It adds to the uncertainty, because we don’t know whether these pieces of legislation will get amended from their current form, and there’s people in both camps pushing and railing against this,” said Sophie Tuson, environment and change lead at legal firm Reynolds Porter Chamberlain.

Confirming the omnibus package would cover all three legislative frameworks, Von der Leyen said: “What’s important is that the content of these laws is good. We want to maintain it, and we will maintain it.”

“But the way we get there - the questions we’re asking and the data points we’re collecting, thousands of them - is too much. So, it is our task to reduce this bureaucratic burden without changing the correct content of the law we all want.”

However, until these changes have been finalised, businesses have been left in the dark as to what this could mean for their reporting requirements.

“It makes it difficult internally with organisations if they’re trying to get the budget to sign off from the board for this work. It’s a difficult conversation if you don’t have complete certainty of what you’re actually being asked to do, and you don’t know whether the landscape is going to shift around you.”

Those with reporting anxiety may welcome the proposed reduction in red tape, and Brussels will be hoping any reforms could boost European competitiveness. But climate activists are concerned the promised omnibus bill could water down environmental reporting requirements and undermine efforts to deliver more sustainable and low carbon business practices.

The first draft of the Omnibus Simplification Package is expected to be published in February 2025. Corporates and consultants will be eagerly awaiting what changes - if any - will impact their sustainability disclosure requirements.

Others suggest any changes to the current reporting rules could end up having little impact on the overall level of disclosure businesses have to provide.

While details remain unclear, Andromeda Wood, president of regulatory strategy at Workvia, highlights how the Commission has indicated it remains in favour of enhanced transparency.

"The language from the Commission has been very keen to emphasise that they don’t want to change the substance,” she said. “What they are trying to do more is deal with overlaps in that simplification process.”

Wood confirmed that Workvia’s clients currently working towards reporting deadlines have found some of the overlapping requirements under the three directives challenging.

“We’ve heard from many companies that there are quite a few overlaps,” she said. “Especially larger internationals who will be under all three requirements - they’re finding it really hard to navigate how to reconcile those differences and how to do so in an efficient way.”

Source: Greenly