CSRD Report 2025: What companies need to know now

What is a CSRD Report?

The Corporate Sustainability Reporting Directive (CSRD) represents the most significant overhaul of sustainability reporting in the European Union to date. This directive replaces and substantially expands the previous Non-Financial Reporting Directive (NFRD), requiring far more companies to report sustainability information at significantly higher standards.

The CSRD mandates disclosure of environmental, social, and governance (ESG) data across a company's operations and value chain. Unlike its predecessor, this corporate sustainability reporting directive requires information to be provided according to binding standards—the European Sustainability Reporting Standards (ESRS)—and must undergo external audit verification.

Initially, large companies were affected from the 2024 financial year. However, following the EU Omnibus Package reforms, many mid-sized firms will see delayed implementation or complete exemption. Nevertheless, smaller enterprises often face indirect transparency obligations through supply chain requirements from their larger business partners.

A central concept underpinning the CSRD is double materiality: organisations must analyse and disclose both their impact on the environment and society, as well as how sustainability issues create risks and opportunities for their own business model. This dual perspective distinguishes modern sustainability reporting from previous compliance frameworks. Learn more about double materiality in CSRD.

CSRD Deadlines and Reporting Obligations

The rollout of CSRD reporting requirements has undergone substantial revision through the EU Omnibus Package. As of November 2025, the European Parliament has approved significantly raised thresholds that will exempt approximately 80% of originally covered companies from mandatory reporting obligations.

Current Reporting Timelines (Updated November 2025)

The phased implementation follows this structure:

• First Wave (Active from 2025): Large companies with over 500 employees reporting for financial year 2024
• Second Wave (Postponed to 2027): Large non-listed companies meeting new thresholds
• Third Wave (Postponed to 2028): Listed SMEs and specific financial institutions

Revised Company Thresholds

The most significant development from the 13 November 2025 Parliamentary decision concerns drastically increased thresholds. Companies subject to CSRD reporting obligations now must meet all of the following criteria:

• More than 1,750 employees (increased from the originally proposed 1,000)
• Annual net turnover exceeding €450 million (significantly raised from €50 million)
• Balance sheet total above €25 million (this threshold remains under final negotiation)

This dramatic increase in thresholds means that the vast majority of medium-sized enterprises previously anticipated to fall under CSRD requirements will now be exempt from mandatory corporate sustainability reporting. However, many of these companies can still benefit from voluntary reporting using the simplified VSME standard for SMEs.

Important: These changes stem from the first phase of the CSRD Omnibus regulation, which entered into force on 17 April 2025. EU member states have until 31 December 2025 to transpose these amendments into national law, with final threshold details still under negotiation between Parliament and Council.

The Omnibus Package: November 2025 Updates

The so-called Omnibus Package introduced sweeping simplifications to corporate sustainability reporting requirements. The EU Parliament's Legal Affairs Committee made major resolutions in October 2025, with formal approval following on 13 November 2025. These changes aim to substantially ease the burden on European companies whilst preserving the directive's core environmental and social objectives.

Key Changes at a Glance

• Phased Implementation & Extended Deadlines: The "stop-the-clock" principle delays second and third wave reporting by two years each. Large companies (>500 employees) continue reporting from 2024; subsequent groups face 2027 and 2028 deadlines respectively.
• Dramatically Reduced Scope: With the November 2025 Parliamentary decision, mandatory reporting will likely apply only to organisations with more than 1,750 employees and revenue exceeding €450 million. Previously proposed lower thresholds have been abandoned, exempting roughly 80% of originally covered entities.
• Voluntary Reporting Pathways: Companies falling below the new thresholds may voluntarily report according to the VSME standard—a simplified framework designed specifically for smaller enterprises. This voluntary approach maintains transparency benefits whilst reducing compliance burden. Explore why startups should embrace ESG reporting.
• ESRS Simplification: Concrete Numbers: Following EFRAG's 31 July 2025 consultation, the European Sustainability Reporting Standards face major streamlining:
  • 57% reduction in mandatory data points (after materiality assessment)
  • 68% reduction including voluntary disclosures
  • 55% overall volume reduction in standards documentation
  • Complete removal of sector-specific requirements
  • Simplified double materiality assessment procedures
• Audit Requirement Flexibility: The reporting process initially requires "limited assurance" audits, with the originally planned transition to "reasonable assurance" postponed beyond 2026. This provides companies and auditors additional time to develop robust verification processes.
• Clearer Materiality Thresholds: New guidance establishes that sustainability topics accounting for at least 10% of relevant financial metrics must be reported. The double materiality principle remains central to determining which environmental and social issues require disclosure.

ESRS Quick Fix: Relief for First Wave Reporters

On 11 July 2025, the European Commission approved temporary relief measures for companies in the first reporting wave. These "Quick Fix" provisions, valid through 2026, include:

• Deferral of requirements to disclose expected financial implications of certain sustainability risks until 2027
• Simplified reporting for biodiversity (ESRS E4), workers in the value chain (S2), affected communities (S3), and consumers (S4) until 2027
• Extension of phase-in provisions to all companies with over 750 employees (previously limited to those under 750)

These transitional provisions acknowledge the practical challenges organisations face in collecting comprehensive ESG data across their entire value chain. Companies should leverage this additional time to build robust data collection and reporting systems. For guidance on effective ESG data management strategies, see our comprehensive resource.

How to Create a Robust CSRD Report

Developing a comprehensive CSRD report requires methodical planning, cross-functional collaboration, and structured data management. The reporting process follows distinct phases that demand clear governance and stakeholder engagement. First-time reporters particularly benefit from establishing robust frameworks early.

1. Preparation & Requirements Analysis

Begin by determining whether and when your organisation faces reporting obligations. Conduct an initial gap analysis to identify which ESRS standards apply and assess current data availability. Understanding the regulatory background through resources like our comprehensive ESRS guide and Omnibus simplification update proves essential.

2. Conducting the Materiality Assessment

The double materiality assessment forms the cornerstone of corporate sustainability reporting. This analysis determines which topics require disclosure by examining both external impacts and internal financial risks. The process involves:

• Identifying potentially material sustainability topics across environmental, social, and governance dimensions
• Assessing impact materiality (how your organisation affects people and planet)
• Evaluating financial materiality (how sustainability issues create risks or opportunities)
• Engaging key stakeholders including employees, local communities, investors, and affected communities
• Documenting the DMA process with clear methodological transparency

For detailed guidance, see our article on materiality assessment for SMEs and explore how VSME approaches double materiality.

3. Data Collection & Consolidation

Systematic data collection across the value chain represents one of the most challenging aspects of the reporting process. Organisations must gather, validate, and structure ESG data from multiple sources:

• Internal operations: energy consumption, waste generation, employee demographics, governance structures
• Upstream value chain: supplier emissions, raw material sourcing, social conditions at extraction sites
• Downstream value chain: product use-phase impacts, end-of-life treatment, customer satisfaction

This requires close collaboration between Finance, HR, Procurement, Operations, and Environmental Management. Many organisations leverage specialised tools for ESG data management to automate collection and ensure accuracy. For supply chain transparency specifically, explore solutions for real-time Scope 3 tracking.

4. Report Preparation & Integration

The sustainability report must follow the identified ESRS standards, presenting information in both narrative and quantitative formats. Key elements include:

• Strategy and business model description including sustainability integration
• Governance structure and oversight of environmental and social issues
• Material sustainability topics with associated risks and opportunities
• Policies, targets, and action plans including transition plans for climate change mitigation
• Performance metrics with time-series data showing sustainability performance trends

The report integrates into the management report and must be delivered digitally in machine-readable XBRL format. Technical preparation requires familiarity with EU Taxonomy requirements and understanding simplified reporting procedures.

5. External Audit & Publication

Completed CSRD reports undergo external verification through limited assurance audits. Auditors assess whether sustainability information has been prepared in accordance with ESRS requirements and whether the company's reporting systems provide reliable data.

Following successful audit, the report publishes on the company website and, where applicable, on external platforms accessible to investors and regulatory authorities. Understanding audit processes and common stumbling blocks proves essential—see our guide on third-party ESG audits.

Challenges & Common Errors in CSRD Reporting

Early experience with corporate sustainability reporting reveals that many organisations underestimate the complexity and resource requirements of comprehensive CSRD compliance. Analysis of first-wave reports published in 2025 identifies recurring challenges and methodological weaknesses that subsequent reporters can avoid.

Key Findings from Initial CSRD Reports

• Double Materiality Assessment Gaps: Whilst recognised as foundational, many DMA processes lack systematic stakeholder engagement. External stakeholders—particularly affected communities and workers in the value chain—receive insufficient consultation in determining material topics.
• Strategic Integration Deficits: Companies identify material sustainability topics but fail to integrate findings into strategy and business model planning. The connection between materiality outcomes and corporate decision-making remains weak. See ESG strategy development for integration approaches.
• Value Chain Data Challenges: Collecting meaningful data across the entire value chain—particularly for Scope 3 greenhouse gas emissions and upstream social impacts—presents the single largest obstacle. Many reports rely heavily on estimated data points rather than primary supplier information. Our guide on managing hidden climate risks in supply chains addresses this challenge.
• Limited Quantitative Disclosure: Reports remain predominantly narrative, with insufficient quantitative data to enable meaningful comparison. Standardised metrics for environmental risks, social performance, and governance impacts appear sporadically.
• Superficial Climate Risk Analysis: Despite ESRS E1 requirements, climate change risk assessments often lack depth. Physical risks from extreme weather and transition risks from policy changes receive cursory treatment. This frequently emerges as a key audit finding. Explore our climate risk management framework.
• Technical Implementation Underestimated: XBRL formatting, structured documentation requirements, and assurance preparation demand more technical resources than anticipated. Companies lacking proper reporting systems face significant challenges.

Typical Mistakes & How to Avoid Them

• Unclear Reporting Obligations: Organisations remain uncertain about whether and when they must report, particularly given Omnibus amendments and delayed national transposition. This causes preparation delays or incomplete reports. Review our analysis of Omnibus changes for clarity.
• Weak Materiality Analysis: Without robust double materiality assessment involving external stakeholders, reports develop blind spots or cover excessive irrelevant topics. The materiality assessment determines reporting scope—getting this wrong cascades through the entire process.
• Data Quality Issues: ESG data scattered across departments, unstandardised formats, and poor documentation undermine report credibility. Establishing clear data governance and leveraging clean, connected data systems proves essential.
• Insufficient Governance: Unclear responsibilities, inadequate resourcing, and poor cross-departmental coordination hamper the reporting process. Sustainability reporting requires CEO-level sponsorship and clear ownership.
• Supply Chain Transparency Gaps: Requirements along the value chain catch many companies unprepared. Business partners in upstream and downstream activities lack systems to provide necessary sustainability information. Building sustainable, compliant supply chains requires proactive engagement.
• Technology Gaps: XBRL implementation, digital publication platforms, and assurance-ready documentation systems demand technical capabilities many organisations lack. Early technology assessment and investment prevents last-minute scrambling.

Conclusion: Most obstacles prove avoidable through early planning, clear governance, and strategic use of external expertise during critical phases. Robust materiality assessment with genuine stakeholder involvement, structured data collection processes, and preparation for technical and audit requirements distinguish successful reporters from those struggling with compliance.

Digitalisation and the CSRD Reporting Process

Digital transformation plays an increasingly central role in efficient CSRD implementation. The directive mandates that sustainability information be provided digitally in machine-readable XBRL format (eXtensible Business Reporting Language). This facilitates automated evaluation by regulatory authorities, investors, and other key stakeholders across the European Union.

Progressive organisations deploy specialised ESG software solutions to meet escalating corporate sustainability reporting requirements. Such platforms support:

• Automated data collection from existing enterprise systems (ERP, HRIS, procurement platforms)
• Consolidation and validation of information across departments and subsidiaries
• Alignment with ESRS disclosure requirements and EU Taxonomy criteria
• XBRL tagging and digital publication in compliance with technical standards
• Audit trail documentation supporting external assurance processes

Digital solutions prove particularly valuable for first-time reporters and organisations with complex value chains. They reduce manual effort, minimise error sources, and create foundations for sustainable, future-proof reporting practices. Learn more about ESG data management technologies and their implementation.

Strategic Recommendation: Assess early whether existing reporting systems can provide required ESG data. Evaluate integration capabilities with current IT infrastructure and consider phased technology implementation aligned with your reporting timeline. For companies in the value chain of CSRD-obligated organisations, even without direct reporting requirements, digital ESG data systems enable efficient response to customer due diligence requests.

Strategic Benefits of Comprehensive CSRD Reporting

A well-crafted CSRD report transcends mere regulatory compliance, serving as a strategic instrument to build stakeholder trust, attract sustainable investment, and differentiate from competitors. Forward-thinking organisations recognise sustainability reporting as value-creating rather than purely cost-generating. See our analysis of sustainability trends among German companies.

Competitive Advantages of Excellence in Sustainability Reporting

• Enhanced Stakeholder Confidence: Transparent reporting signals responsibility and future viability to customers, employees, investors, business partners, and local communities. This trust translates into stronger relationships and improved reputation. Explore effective ESG storytelling approaches.
• Improved Access to Sustainable Finance: Banks and institutional investors increasingly integrate ESG criteria into lending and investment decisions. Audited sustainability reports meeting CSRD requirements can reduce capital costs and open access to green financing instruments. Learn about climate-friendly funding programmes.
• Supply Chain Positioning: Even without formal reporting obligations, large business partners expect ESG transparency from suppliers. A CSRD-aligned report strengthens your position in procurement processes and contract negotiations. See our guide on sustainable supply chain management.
• Internal Process Improvement: The structured data collection and governance discussions required for CSRD often reveal operational inefficiencies and risk exposures. This catalyses improvements in resource management, risk management processes, and strategic planning.
• Procurement Advantages: Public and private tenders increasingly require ESG credentials. CSRD-compliant reporting can prove decisive in competitive bidding situations, particularly for government contracts and large corporate partnerships.
• Talent Attraction: Comprehensive sustainability disclosure appeals to environmentally and socially conscious professionals. In competitive labour markets, genuine ESG commitment differentiates employers.

Early investment in robust sustainability reporting strengthens market position whilst reducing future regulatory risk and reputational exposure. Additional strategic insights available in our articles on lifecycle assessment benefits and TNFD framework implementation.

Johannes Fiegenbaum
Sustainability Consultant for Enterprises & Startups
With over 15 years of experience in ESG strategy and technology implementation, Johannes supports companies in navigating CSRD requirements and building competitive sustainability frameworks.
About Johannes