What is CSRD Reporting: Requirements & Best Practices
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This February the EU Commission has adopted a new package of proposals, simplifying their regulations on sustainability and ESG. The goal of this package is to consolidate the climate aspirations of the EU with their aim for a “simpler and faster” Europe.

The proposals, brought together in an “Omnibus”, intend to reduce the current reporting requirements and scope of the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy. 

The Omnibus package has been designed by the Commission in order to “cut red tape” and “simplify EU rules for citizens and business”.

ESG reporting regulations and requirements in the EU have been under significant change in the last few years. This is yet another adjustment for organisations to make on their sustainability journey.

But what is this update to the CSRD, and what does the ‘Omnibus’ mean for businesses?

What is the ‘Omnibus’?

The ‘Omnibus’ is packaging together several proposals in a number of legislative fields, including EU Taxonomy, CSRD, CSDDD, sustainability due diligence, and sustainable finance reporting.

The European Commission’s stated aims with the proposals are to “simplify EU rules and boost competitiveness, and unlock additional investment capacity”.

The proposals aim to reduce the complexity of EU requirements for all companies, but notably will impact SMEs and small mid-caps (SMCs) the most. The EU Commission wants to focus their regulatory framework on the largest companies, who will undoubtedly have a larger impact on the environment. They are still focused on enabling companies to access the necessary sustainable finance to fund their clean transition.

This first package is said by the EU Commission to cover steps to: 

  • Make sustainability reporting more accessible and efficient  
  • Simplify due diligence to support responsible business practices  
  • Strengthen the carbon border adjustment mechanism for a fairer trade  
  • Unlock opportunities in European investment programmes 

It is worth noting that the European Parliament and EU Member States will now have the chance to prepare amendments to these legislative proposals.

We’re going to set out below the key changes proposed for the CSRD and the potential impacts this could have on EU companies and beyond.

What does this mean for the CSRD?

There are several key changes to the CSRD in the Omnibus package that are important to highlight.

Reduced Scope and Reporting Thresholds

The proposal in the Omnibus package is expected to reduce the number of companies subject to CSRD mandatory reporting requirements by around 80%.

The scope of the CSRD would change to large companies with more than 1000 employees. This would align the scope of the CSRD with that of the CSDDD, ensuring greater consistency for sustainability legislation within the EU.

In addition, the proposal suggests that reporting requirements could now apply to non-EU companies that generated a net turnover of EUR 450 million with EU subsidiaries or an EU branch that generated EUR 50 million, instead of the previous amounts of 150 million and 40 million.

The package also suggests that smaller companies not under the scope of mandatory reporting could still choose to report voluntarily using simplified standards. These will be based on the Voluntary SME (VSME) standard developed by EFRAG.

Implementation Schedule

The CSRD’s current implementation schedule for the directive is:

 Wave 1: Large public companies with more than 500 employees must report for the first time in 2025 for the financial year 2024. 

Wave 2: All other large companies must report for the first time in 2026 for the financial year 2025.

Wave 3: SMEs listed on EU regulated markets must report in 2027 for the financial year 2026, with the possibility to defer a further two years. 

In the Omnibus, it proposes postponing the Wave 2 and Wave 3 reporting requirements by two years. This aims to stop businesses from initially qualifying under the existing criteria and later becoming ineligible due to the changes in thresholds, especially after they have already invested in creating a sustainability report.

Revision of the ESRS

The European Commission is set to revise the first set of the Sustainability Reporting Standards (ESRS), in order simplify and reduce the requirements, as well as enhancing clarity with sustainable finance frameworks. 

This revision will reduce the number of data points under the ESRS, clarify any requirements that remain unclear, improve consistency with other EU and global legislation and provide guidance on applying double materiality.

The proposed ESRS revision aims to decrease the reporting burden for any and all undertakings, and help relieve the consequent effect on SMEs outside the CSRD scope, who are still impacted by it.

Sector-specific Standards

The CSRD was initially going to introduce sector-specific mandated reporting standards, in order to enhance comparability and provide more sector-specific guidance for ESG.

The new Omnibus proposal, however, eliminates this mandate due to concerns about additional reporting burdens from increased disclosure requirements. This allows companies to focus on implementing just the ESRS, and for sector-specific guidance they can refer to other international sector-based standards.

Value Chain Cap

The current CSRD aims to protect smaller companies in supply chains from facing excessive reporting requirements with a value-chain cap. This indicates that the ESRS should not impose reporting obligations that demand more value chain details from SMEs than what is mandated by the listed SMEs (LSME) standard for disclosure.

The EU Commission proposes to extend the usage of the value-chain cap by applying it directly to the reporting company.

According to the proposals, the VSME, provided by EFRAG for SMEs excluded from the CSRD, will serve as this limitation. This will replace the LSME standard and will also safeguard businesses with under 1000 employees from overwhelming sustainability data demands.

Limited Assurance

The CSRD currently requires limited assurance for sustainability reporting. To lessen this burden, the Commission’s proposal suggests removing the possibility of the CSRD going from limited to reasonable assurance. 

Furthermore, rather than creating a formal assurance standard, the Commission plans to release specific assurance guidelines by 2026.

What does this mean for companies?

The Commission’s proposed updates to the CSRD in the Omnibus package will reshape ESG reporting obligations for all companies operating in the EU. 

It’s crucial to understand that these suggestions have not been implemented yet. Any modifications must receive approval from both the European Parliament and the Council, which requires a significant amount of time.

The Omnibus proposals are focused on simplification, flexibility and aligning with existing frameworks for the CSRD.

What this means for companies is:

More preparation time: with a delayed timeline it provides an opportunity to refine your data collection and reporting processes. 

Renewed materiality focus: with the updated guidance companies will need to reassess and refine their materiality approach to ensure their disclosures align.

Consistency with other legislation: for companies that are reporting under multiple regulations there will be a closer alignment with ISSB and GRI standards. 

Less burden on the administration: the simplifying of the CSRD means that companies can streamline their ESG workflows and manage their sustainability resources more effectively.  

 However, it’s important that companies don’t get complacent with their reporting, or think that this means they shouldn’t focus on their ESG reporting at all.

The Omnibus amendments simply redistribute accountability. Reduced reporting requirements do not imply reduced risk; instead, investors may need to conduct more thorough investigations to obtain a complete understanding.

Sustainability strategies should not be scaled back, but rather companies should ensure they are focusing on impacts that are of critical materiality. Regulations might lessen their burden today, but stakeholder expectations still remain.

For organisations not included in the updated requirements, choosing to report under the CSRD voluntarily is still considered a best practice. This approach helps companies get ready for upcoming regulations, enhances their overall ESG strategy, and satisfies the increasing demands of stakeholders and investors who may seek similar reporting.

How can Convene help with the CSRD?

We have developed our own ESG reporting tool: Convene ESG.

Convene ESG provides an end-to-end platform to collect data, track progress, compare with peers, align with frameworks and produce ESG reports.

With Convene ESG, you can collect your data for all the necessary metrics in the CSRD legislation, ensuring that you are compliant with regulations. With various global and regional frameworks also built in to Convene ESG, you will easily comply and report against any other standards without the need to repeat the reporting process.

With our new supplier module specifically built to meet the ESRS requirements, we’re here to ensure your organisation is ready for ESRS reporting.

We want to ensure efficiency, compliance, and strategic ESG insight, with automated and centralised supplier data collection and pre-built forms that simplify CSRD data collection.

We also have upcoming capabilities like AI-driven benchmarking and custom questionnaires to address unique ESG goals.

Convene ESG is designed to make the reporting process as easy as possible, so you can be prepared for the changes to and challenges of ESG regulations.


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Charlotte Wright
Charlotte Wright

Charlotte works as a Content Writer at Convene.

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