ESG reporting obligation according to CSRD
New guidelines for groups and companies in the EU
Companies in Europe have a lot to look forward to in the coming years. The European Union’s Corporate Sustainability Reporting Directive (CSRD) will require many companies to prepare a sustainability report in accordance with the three ESG criteria of environmental, social and governance from the 2025 reporting year.
The aim of this EU measure is to create more transparency and better comparability of the respective sustainability activities. Previously, every company was able to design and decorate its sustainability report as it wished, but the new directive creates a new uniformity.
However, it is not only the large companies that are required to report first that are affected: Small and medium-sized enterprises (SMEs) should also address this issue as soon as possible. This is because the guidelines will be extended to smaller companies over time anyway, meaning that they can already benefit from addressing the issue at an early stage.
CSRD: Which companies are required to report?
The CSRD applies to companies that are required to prepare financial statements and fulfill at least two of the following three criteria:
>250
Employees
>40
million euros Sales revenue
>20
million euros Balance sheet total
When does the CSRD reporting obligation apply?
Companies that were already required to report under the previous NFRD (Non-Financial Reporting Directive) standard must report on the year 2024 in 2025.
From 2026, all other companies that meet two of the above criteria will be required to report for the year 2025.
CSRD in concrete terms
- In future, sustainability information must be integrated into management reports on an equal footing with financial data.
- An external review of this information by the auditor is prescribed by the CSRD.
- The EU-wide, uniform “European Sustainability Reporting Standard” (ESRS) is being developed by the “Reporting Advisory Group” (EFRAG).
- An estimated 50,000 EU companies will be affected by 2028, including 15,000 in Germany alone.
- Non-reporting companies could nevertheless be requested to provide data by existing supply chains of reporting partners.
“What you can do today, …”:
Start preparing your sustainability report now!
While a greenhouse gas or CO2 balance can almost be described as standard today, comprehensive ESG reporting is still more of a “freebie” for most companies. However, SMEs in particular should not rest on their laurels for too long – because it is already a reality that clients require their suppliers to have an EcoVadis Silver Status rating, for example, as a minimum requirement for cooperation.
A meaningful sustainability report is also becoming increasingly important when it comes to banks granting loans. Companies that have “done their homework” in this area also gain significant advantages here.
We also recommend that smaller companies develop a “voluntary” sustainability report
In Germany, around 15,000 companies will soon have to report in accordance with CSRD requirements. They will also have to check how sustainably their suppliers work. It can therefore make sense for SMEs to get to grips with the topic at an early stage – because as soon as larger companies demand proof of their sustainability efforts, smaller companies that do not actually have to submit a report will also be affected!
Our tip: Create your first voluntary sustainability report. This will give you initial experience with the concept and the processes. This will give you the ideal basis for efficiently ensuring that your reporting meets all legal requirements in the future.
Just columns of figures, or also helpful messages and genuine transparency?
While the introduction of CSRD gives us deeper insights into companies’ sustainability efforts, true transparency requires more than just compliance.
Our agency is committed to communication that goes beyond numbers and is based on clarity, honesty and openness: Clear, universally understandable messages, an honest dialog free of greenwashing and an open discussion about challenges as well as opportunities for improvement are key.
Although CSRD guidelines improve access to sustainability-related information, it is crucial that this information is not only understandable to experts, but to everyone. Sustainability concerns us all. Therefore, it is important that companies of all sizes share their authentic sustainability journey, openly report on their progress and challenges and thus contribute to real change.
Change does not happen overnight, but every honest contribution counts on our common path to a more sustainable future.
A common thread instead of a jungle of data: the materiality analysis.
The current EU directive comprises more than 300 pages, so in extreme cases over 1,000 data points must be recorded. In addition, more than 80 percent of the data queries do not involve pure figures, but qualitative information.
Which data points of your company are relevant for reporting at all is determined at the beginning of the process as part of a CSRD-compliant materiality analysis in 2-3 workshops. This preparatory work is usually only required once; it does not have to be repeated for subsequent ongoing reporting.
The results of the materiality analysis are cross-checked and approved by an auditor. Only then does the distribution of individual tasks for specific data collection in your company begin.
We are happy to support and accompany you from the very beginning, step by step.
Sustainable data collection thanks to professional software
Together with our cooperation partner CONSUST in Paderborn, we offer you comprehensive support in the areas of data collection and consulting. The all-in-one ESG solution CONSUST FramesCube enables companies to fulfill their ESG requirements efficiently and to manage them on their own in the medium term. It also enables the structured collection, analysis and optimization of ESG data. As a multi-framework compatible ESG solution, FramesCube covers all common ESG frameworks in German and English in one solution, including CSRD, EU taxonomy, LKSG BAFA reporting. The functional scope ranges from double materiality analysis, structured data collection and gap analysis to risk analysis in accordance with the LkSG, content-related guidance in the form of tips and best practices from day-to-day consulting and an intelligent role and authorization concept through to simple goal setting, action tracking and progress monitoring as well as report generation and an integrated audit workflow.
Our cooperation partner:
In addition, the CONSUST FramesCube can serve as a central repository for all relevant ESG information in the future. Thanks to intelligent workflows such as the automatic assignment of data points and real-time collaboration, FramesCube saves you an enormous amount of time and resources during data collection. The ESG tool is therefore not only used for data collection, but also becomes the “control center” of your change process. In addition, CONSUST offers one of the fairest pricing models on the market and only offers what you really need.
The data collected forms the basis of our work up to the finished, CSRD-compliant sustainability report. As an experienced communications agency, we can categorize your data very well and process it into a professional sustainability report for your company – e.g. as a printed magazine or interactive website with video elements.
Feel free to contact us: We will provide you with an initial overview, remain at your side and will be happy to advise you.
