CSRD: One Year In—What’s Next & Why 40,000 Businesses Must Act Now!

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The ESG landscape is evolving at an unprecedented pace. What was once a voluntary initiative is now a regulatory and market-driven necessity. With new reporting mandates, investor expectations, and competitive pressures, companies are being pushed to adapt quickly—and among all the ESG drivers, regulation remains the strongest force.

Fear of reputational damage and financial penalties has elevated ESG reporting to the top of the agenda for CEOs—not just in large corporates, but also in listed SMEs. This urgency explains why so many are entering the ESG space—because, simply put, with every challenge comes opportunity.

As CSRD reporting rolls out, thousands of businesses across Europe—and beyond—are now required to disclose their ESG performance. Many more are voluntarily strengthening their sustainability positioning, knowing that strong ESG practices are no longer just about compliance—they're a competitive advantage.

This rapid transformation means one thing:
🚀 The demand for ESG expertise has never been higher.

For years, I’ve been advocating for career shifts toward ESG, helping professionals recognize the growing opportunities in this space. In January this year, I launched the ESG Masterclass, designed to provide the know-how to build a career in ESG.

But the opportunity is even bigger—not just for those interested in a corporate ESG career, but also for those passionate about building their own ESG service business to help companies achieve compliance and gain a strategic edge.

With big companies and listed SMEs now mandated, and others preparing for future compliance, understanding ESG is no longer optional. The market is shifting fast, and those who act now will have a first-mover advantage in shaping the future of sustainable business. This rising demand explains the explosion of ESG service offerings—which is great news for those looking to establish themselves in this space.

Let’s dive into CSRA status , who’s affected next, and why this is the perfect moment to enter the ESG market.

CSRD Reporting Has Begun—And the Impact is Clear

As we step into 2025, we are witnessing a major shift in corporate ESG reporting. By the beginning of this year, large EU public interest entities (PIEs) with 500+ employees, previously reporting under the Non-Financial Reporting Directive (NFRD), must now publish their first CSRD-aligned reports for FY 2024.

We have already seen some of the first movers, such as Novo Nordisk and Ørsted, publishing early CSRD-compliant reports. These reports showcase how the new CSRD-ESRS framework is raising the bar, bringing a more structured, detailed, and standardized approach to ESG disclosures.

But this raises an important question:

How different is CSRD from NFRD? Is it really that big of a change?

The answer is yes—and here’s why.

CSRD vs. NFRD: What’s Changing?

While NFRD was the first attempt at standardizing sustainability reporting across the EU, it had several limitations, leading to inconsistent and often insufficient ESG disclosures. CSRD aims to fix these gaps by introducing clearer, broader, and more structured requirements.

Key Differences Between NFRD and CSRD

🔹 Broader Scope:

NFRD applied only to around 11,000 companies across the EU.

CSRD expands coverage to 50,000+ companies, including large companies, listed SMEs, and even non-EU entities.

🔹 More Detailed Reporting Requirements:

NFRD allowed flexibility in reporting, with many companies choosing their own frameworks (GRI, SASB, TCFD, etc.).

CSRD mandates a structured reporting framework using European Sustainability Reporting Standards (ESRS)—ensuring comparability and consistency.

🔹 Double Materiality Approach:

NFRD focused mainly on how sustainability impacts the company (financial materiality).

CSRD requires a double materiality assessment—companies must report both on how sustainability issues impact them and how their business activities impact people and the environment.

🔹 Mandatory Assurance (Audit Requirement):

NFRD reports were largely unaudited, leading to inconsistent ESG data quality.

CSRD requires limited assurance from independent auditors, enhancing credibility and reducing greenwashing risks.

🔹 Digital Tagging for Transparency:

NFRD reports were typically found in PDFs or annual reports, making data difficult to analyze.

CSRD mandates digital tagging using XBRL, making ESG data machine-readable and accessible for investors, regulators, and stakeholders.

Why This Matters

The shift from NFRD to CSRD is a game-changer—not just for companies, but also for investors, regulators, and ESG professionals.

✅ For businesses, this means higher compliance pressure but also greater clarity & investor trust.
✅ For investors & stakeholders, CSRD brings more transparent, comparable ESG data for better decision-making.
✅ For ESG professionals, the demand for ESG expertise—whether in corporate careers, freelancing, or advisory services—is skyrocketing.

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With CSRD now in full motion, the next question is:

What’s Next? Who Needs to Prepare?

The first wave of CSRD reporting has started, but more businesses will soon join the compliance wave. Here’s what’s coming next:

✅ 2026 (Reporting on FY 2025): All large EU companies meeting 2 of 3 criteria (€50M revenue, €25M assets, 250+ employees).
✅ 2027 (Reporting on FY 2026): Listed SMEs (with an opt-out until 2028).
✅ 2029 (Reporting on FY 2028): Non-EU companies with €150M+ in EU revenue and a significant EU presence.

And That’s Not All: The VSME Standard for Non-Listed SMEs

While CSRD primarily applies to large companies and listed SMEs, the European Financial Reporting Advisory Group (EFRAG) has also introduced a Voluntary SME (VSME) Standard—a simplified ESG reporting framework designed specifically for non-listed SMEs.

Why Would Non-Listed SMEs Report If It’s Not Mandatory?

Many non-listed SMEs may wonder why they should voluntarily disclose their ESG performance when they are not legally required to report under CSRD.

The reality is that investors, banks, and large corporate customers are increasingly demanding ESG transparency from their supply chains and business partners. Even without a legal obligation, SMEs that fail to provide some level of ESG disclosure may find themselves:

🔹 Losing business opportunities with ESG-conscious clients.
🔹 Facing challenges in securing funding from banks and investors.
🔹 Falling behind competitors who proactively align with ESG expectations.

The VSME Standard offers a practical solution—a lightweight, easy-to-use framework that enables SMEs to stay competitive, attract funding, and meet market expectations without the complexity of full CSRD compliance.

The VSME standard is a great entry point for SMEs looking to integrate ESG into their business strategy without the burden of complex reporting.

The Omnibus Directive: Aiming for Simplicity and Efficiency

As the ESG regulatory landscape continues to evolve, the European Commission has introduced a new initiative—the Omnibus Directive—which aims to streamline and simplify existing corporate sustainability directives. This initiative is designed to enhance economic competitiveness while reducing administrative burdens on companies, particularly those navigating the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy.

The Omnibus Directive is a legislative initiative intended to harmonize and consolidate key ESG regulations into a more cohesive and efficient framework. The objective is to reduce complexity, improve consistency, and ease the reporting burden for companies operating under multiple sustainability-related directives.

By integrating CSRD, CSDDD, and the EU Taxonomy, the Omnibus Directive seeks to:
✅ Reduce duplication in sustainability reporting requirements.
✅ Ensure better alignment between different ESG frameworks.
✅ Simplify compliance processes for companies, especially SMEs.
✅ Enhance economic competitiveness by making sustainability regulations more business-friendly.

What Could Change?

While the full details of the Omnibus Directive are still being developed, we anticipate potential adjustments to the scope and reporting thresholds of CSRD, CSDDD, and EU Taxonomy regulations. These could include:

🔹 Changes in the reporting thresholds under CSRD—potentially impacting which companies must comply.
🔹 Adjustments in due diligence requirements under CSDDD to ease the compliance burden on SMEs.
🔹 Better alignment between CSRD and the EU Taxonomy, reducing inconsistencies in sustainability disclosures.

For companies already preparing for CSRD and other ESG regulations, the Omnibus Directive could bring much-needed clarity and efficiency. However, it’s essential to stay proactive and prepared—as adjustments in scope could either exempt some businesses from reporting requirements or expand obligations to new sectors.

With the detailed Omnibus proposal expected end of February 2025, we’ll soon have more clarity on how ESG regulations will evolve. In the meantime, businesses should continue to align with existing ESG frameworks while remaining agile for potential regulatory changes.

Final Thoughts: Why This Is the Perfect Time to Enter ESG

The ESG space is no longer niche—it has become a core business function with growing regulatory pressure, investor scrutiny, and competitive advantages at stake.

Whether you’re:
✅ A professional looking to shift into ESG,
✅ A business preparing for compliance,

📢 The ESG Masterclass is a valuable resource to help you navigate this evolving landscape.

If you want to understand ESG regulations, reporting frameworks, and how to position yourself or your business for success, this course will give you the knowledge and practical skills you need.

🚀 The time to act is now.

Are you preparing for CSRD? Looking to build a career or business in ESG?
💬 Let’s discuss how you can stay ahead in this growing market.

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