A watered-down CSRD
Here’s a note from Ellie Austin:
The CSRD has been gutted – and I’m feeling, well… gutted to be honest.
My feed has been flooded with reactions to the disappointing hashtag#Omnibus proposal announced yesterday, which significantly weakens the Corporate Sustainability Reporting Directive (#CSRD) – the EU legislation designed to improve transparency and accountability in corporate sustainability reporting.
❔ What happened to CSRD (and #CSDDD)?
– The biggest shift is a drastic reduction in the number of companies required to report, cutting the scope by 80%.
– Only the largest companies (over 1,000 employees and €50m turnover) will need to align with CSRD now.If you haven’t yet caught up on all the changes, check out the excellent summaries from Maria Tymtsias and Andreas Rasche.
While this is still a proposed change only, it’s a huge curveball to businesses that were previously in scope.
So what’s next? How might companies respond?
🔹For now, companies in countries where CSRD has been transposed into national law still have to keep reporting or risk being non compliant – despite signals the EU wants to ‘fast track’ these changes.
🔹Customers, investors, retailers, and supply chain partners will continue to demand data – legislation may shift, but data requests and expectations are only increasing. The ESRS remains a valuable framework for companies to align with, and it makes sense to report data in a consistent and comparable way.
🔹 At least CSRD has brought the concept of double materiality – looking at both financial and impact materiality – onto the radar of many leadership teams, and it can still support strategic decision-making.
🔹The revised B Corp standards align closely with ESRS requirements, so companies that are already embedding double materiality and following a CSRD-aligned approach will be well-positioned for future B Corp certification.
🔹There’s voluntary SME guidance from EFRAG that SMEs can follow – but without the regulatory teeth, it’s easy for the laggards to ignore it.