CSRD Compliance & Beyond

Speaking on the rising expectations around CSRD across Europe, alongside emerging UK standards such as SRS S1 & S2, Pranav Phadke highlighted that these are placing increasing pressure on organisations to improve transparency, accountability and data quality.

The most important shift is that ESG reporting is no longer just about compliance.

CSRD is more of an opportunity for a holistic sustainability transformation and value generation than just a regulatory burden.

Why ESG Risk Management is Now a Business Priority

At the centre of CSRD and future frameworks like UK SRS S1 & S2 is double materiality.  Businesses need to understand how sustainability issues affect financial performance and consider how their operations impact people and the environment.

Pallavi Roy covers the challenges organisations experience when building their ESG capabilities, such as:

•  Data spread across multiple systems and teams
• Reliance on spreadsheets and manual processes
•  Lack of clear ownership and governance
•  Limited engagement beyond sustainability teams
•  Difficulty understanding regulatory requirements

Companies are increasingly integrating CSRD compliance with their business strategy and transforming it from a regulatory task into a decision making tool.

For organisations preparing for UK SRS S1 & S2, these gaps will need to be addressed quickly.

A Practical Way to Get Started

A structured approach helps reduce complexity and build capability over time:

•  Identify what is material to your business
•  Map CSRD and UK SRS S1 & S2 requirements
•  Assess gaps and define key metrics
•  Start collecting data even if it is manual
•  Involve the right stakeholders
•  Build initial reporting processes
•  Introduce tools and automation
•  Improve data quality and governance
•  Integrate ESG into business strategy

A Common Misconception

One of the biggest misconceptions is that ESG reporting is something done once a year. In reality, reporting reflects how the organisation operates throughout the year. The real work sits behind the report. It is about data, processes, and decision making.

What the Omnibus Changes Mean

Marie-Theres Stritzelberger explained the launch of The Omnibus Package. Comprised of three key proposals, it aims to reduce complexity, aligning regulations, and easing the reporting burden under CSRD. Understanding these changes is critical for planning your next steps.

Proposal 1: Stop the Clock

This is the most immediate and confirmed change. It delays CSRD reporting timelines for wave 2 and wave 3 companies by around two years.

•  Large companies not previously under NFRD will now report later than originally planned
•  Smaller listed companies also benefit from the delay
•  Wave 1 companies (already reporting) and non EU companies remain unchanged

This proposal has already been approved by the EU Parliament, with final legal adoption still pending.

Proposal 2: Content Proposal

This proposal focuses on reporting requirements and is still under discussion.

Key proposed changes include:

•  Reducing scope, with reporting focused on companies with more than 1,000 employees
•  Increasing voluntary reporting for companies outside the threshold
•  Limiting value chain data requests, especially to avoid burdening smaller suppliers
•  Simplifying ESRS standards, including removing some requirements such as sector specific standards
•  Maintaining limited assurance, rather than moving to stricter audit levels

Further clarity is expected once these proposals are finalised.

Proposal 3: Simplification of CBAM

The third proposal focuses on simplifying the Carbon Border Adjustment Mechanism, aiming to reduce complexity in carbon related reporting and compliance.

Looking Ahead

The Omnibus package does not remove requirements. It delays timelines and simplifies elements, but ESG reporting remains a core expectation for businesses.

The organisations that continue preparing now will be in a far stronger position when reporting requirements fully apply.

Questions Asked and Answered

What does “double materiality” mean?

In simple terms, it’s about looking at things from both sides.

You need to understand how sustainability issues affect your business financially, as well as how your business impacts the environment and society. For example, rising raw material costs might affect your bottom line, while your operations could also be creating environmental or social impacts.

Why are there so many different proposals in the Omnibus package?

It can feel complex, but that’s because it brings together several different regulations, including CSRD, the Corporate Sustainability Due Diligence Directive, and CBAM.

They’ve been split into separate proposals so the most urgent decisions, like delaying timelines, can be made quickly, while more detailed areas like reporting requirements can be worked through properly.

What do the CSRD Omnibus updates mean for UK organisations?

The UK is moving in a similar direction, with its own sustainability disclosure standards being developed in line with the International Sustainability Standards Board.

These are expected to be available in 2025, with the potential for mandatory reporting for listed companies from 2026, based on 2025 data.

What year should companies report on through CSRD?

CSRD reporting always looks back at the previous year. So if you’re reporting in 2026, you’ll be using data from 2025.

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