Updates on CSRD in 2025

The Corporate Sustainability Reporting Directive (CSRD) is a regulatory framework introduced by the European Union to enhance and standardise sustainability reporting across businesses. It replaces the previous Non-Financial Reporting Directive (NFRD) and significantly expands the scope of companies required to disclose their corporate sustainability reporting practices. The final guidance was issued by the EU in July 2024 and since them there have been significant updates on CSRD. Starting in 2024, companies must adapt to these new CSRD reporting requirements, with their first reports due in 2025. 

Read More: CSRD Reporting: EU Adopts Final Guidance 

Why is CSRD Important? 

CSRD plays a crucial role in reshaping corporate sustainability strategies and transparency. Key benefits of CSRD include: 

• Encouraging transparency and accountability in corporate sustainability practices. 

• Helping stakeholders, including investors, consumers and regulators, make informed decisions based on standardised and comparable ESG data. 

• Driving companies to integrate sustainability into core business strategies, promoting long-term resilience. 

• Opening up trading opportunities with other organisations and customers worldwide by aligning with global sustainability standards. 
  
  

Key Updates on CSRD 

CSRD implementation reaches a crucial milestone in 2025, mandating compliance from 39,000 additional organisations. As the CSRD rollout continues, there are certain updates in 2025 that businesses need to be aware of and prepare for: 

Changes to Reporting Deadlines 

• First CSRD Reports Due: Companies previously subject to NFRD requirements must submit their first reports in January 2025, covering the financial year 2024. 

• Staggered Implementation: 
  • Large public-interest companies with over 500 employees are the first to report IN 2025. 
  • Companies with more than 250 employees and €40M turnover will begin reporting in 2026. 
  • Listed SMEs will follow in 2027, with voluntary opt-out available until then

Ongoing Transposition into National Laws 

• The CSRD is currently being integrated into national laws across EU member states, leading to variations in how different countries implement the directive. 

• Companies operating in multiple EU jurisdictions must keep track of these CSRD reporting changes to ensure compliance. 

• Each country’s national regulatory body will provide specific guidelines for sustainability reporting in the EU, impacting reporting formats, verification requirements, and penalties for non-compliance. 

European Sustainability Reporting Standards (ESRS) 

• Mandatory Alignment: Businesses must comply with the ESRS, which standardise how companies disclose their corporate sustainability reporting. 

• Sector-Specific Reporting: Future updates will introduce industry-focused reporting standards, requiring businesses to disclose ESG metrics relevant to their sector. 

• Third-Party Assurance: Companies must now have their CSRD reports audited, ensuring the accuracy and reliability of their disclosures. 

Digital Reporting & Assurance under the CSRD 

One of the key developments introduced is the requirement for digital reporting using the European Single Electronic Format (ESEF). This will have significant implications for businesses, as they will need to adopt digital tools and processes to ensure compliance. 

Digital Reporting and the European Single Electronic Format (ESEF) 

The CSRD requires companies to report their sustainability data in a digital format that is machine-readable. Specifically, the European Single Electronic Format (ESEF), which was first introduced for financial reporting under the EU Transparency Directive. ESEF is a format based on XHTML (Extensible HyperText Markup Language) and XBRL (eXtensible Business Reporting Language), which ensures that reports are accessible, interoperable and easily analysed by regulators, investors and other stakeholders. By using this standardised format, companies will facilitate the easier extraction, comparison and processing of sustainability data across jurisdictions. 

This shift to digital reporting is aligned with broader EU efforts to enhance the European Green Deal and the transition to a sustainable economy. The ESEF format makes sustainability data available for further analysis by both regulators and third-party auditors, enabling more efficient monitoring and enforcement of corporate sustainability efforts. 

The Role of Third-Party Auditors in the CSRD 

One of the most significant changes under the CSRD is the mandatory requirement for companies to seek external assurance on their sustainability reports. This requirement places a greater emphasis on the accuracy and reliability of the reported data, ensuring that it reflects the true sustainability performance of the company. Third-party auditors will play a crucial role in validating the information provided in the sustainability report. These auditors are expected to verify that the company’s sustainability disclosures are complete, accurate and compliant with the applicable reporting standards set by the EU and the CSRD. In addition to reviewing the sustainability report’s alignment with the EU Taxonomy and other regulatory frameworks, auditors will be responsible for checking the internal controls and data management systems used by the company to collect and report sustainability information. 

Auditors will also assess whether the reporting is consistent with other public disclosures, such as the company’s financial statements, and if the sustainability risks and opportunities identified by the company are adequately integrated into its corporate strategy. The increased reliance on third-party auditors for assurance under the CSRD ensures that sustainability reports are held to the same rigorous standards as financial reports. 

Impact on Businesses and How to Prepare 

Adapting to CSRD requires businesses to take a proactive approach to sustainability data collection and reporting. Here’s how organisations can prepare: 

• Assess Reporting Obligations: Determine when your company is required to begin CSRD reporting based on size, revenue and sector. 

• Develop Internal Reporting Mechanisms: Implement robust systems to track ESG data, ensuring compliance with CSRD reporting requirements. 

• Align with the ESRS: Familiarise yourself with the European Sustainability Reporting Standards to streamline disclosures. 

• Engage Stakeholders: Collaborate with investors, regulators and sustainability experts to improve data collection and accuracy.  

• Seek Professional Guidance: Given the complexities of EU CSRD compliance, working with experienced consultants can simplify the process. 

How Tunley Environmental can help with CSRD Reporting 

Our PhD-qualified scientists lead CSRD consulting services at Tunley Environmental to help firms manage sustainable reporting. This service includes: 

• Double Materiality Assessment: We conduct a Double Materiality Analysis (DMA) to identify key sustainability areas your company must report on. Our DMA report will serve as the foundation for your CSRD compliance strategy. 

• Carbon Accounting & Emissions Reporting: Our team identifies emission sources, quantifies the baseline, and develops reduction strategies. We provide precise, peer-reviewed calculations for Scope 1, 2 and 3 emissions, ensuring full compliance with CSRD requirements. 

• Report Preparation & Compliance Alignment: We structure and draft your sustainability reports, aligning them with CSRD disclosure requirements and the European Sustainability Reporting Standards (ESRS) for regulatory compliance. 

• Science-Based and Net Zero Targets: We help organisations establish science-based targets and net-zero objectives, ensuring alignment with the latest climate science and regulatory expectations. 

• Stakeholder Engagement: CSRD reporting requires transparent engagement with stakeholders. Our service includes developing an effective stakeholder engagement strategy, assisting with Scope 3 emissions management and supplier engagement strategies to mitigate indirect GHG emissions. 

As CSRD regulations continue to evolve, we also offer ongoing compliance support. We provide continuous consultation to keep your organisation compliant with new reporting updates, helping avoid penalties and reputational risks. 

Learn More: Your Guide to Sustainability Regulations

The Bottom Line 

CSRD introduces a new era of sustainability reporting, affecting thousands of companies in the EU and beyond. The expanded scope, digital reporting requirements and mandatory third-party assurance create major operational changes for businesses. Early preparation and systematic approaches will determine how well companies implement CSRD. Businesses must build resilient data collection systems and create dedicated teams. They need to tackle common challenges like data quality issues and resource allocation effectively. As regulatory expectations evolve, staying ahead of CSRD reporting changes is crucial for businesses operating within the EU. Contact Tunley Environmental to ensure your organisation meets all corporate sustainability reporting directive requirements.