11.2025 Sustainability – what next?

In November 2025, the EU Parliament adopted its position on the planned simplifications to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) as part of the so-called “Omnibus” procedure. The most important proposed changes are:

For the CSRD (sustainability reporting)

• Postponement of reporting obligations: The deadlines for reporting obligations for companies in the second and third waves have been postponed by two years.
  • Large companies that were not previously subject to reporting requirements (originally from 2025) are now expected to report from 2028 for the 2027 financial year.
  • Listed small and medium-sized enterprises (SMEs) (originally from 2026) now have until 2029 for initial application.
• Reduction of reporting content: The number of data points required in the European Sustainability Reporting Standards (ESRS) is to be reduced and simplified.
• Voluntary EU taxonomy reporting requirements: Companies with fewer than 1,000 employees or a turnover of less than €450 million are no longer required to disclose their compliance with the EU taxonomy; this will become voluntary.
• Revision of the ESRS: The reporting standards are to be completely revamped and the interfaces with other regulations improved.

For the CSDDD (supply chain due diligence)

• Limited scope: Due diligence obligations will focus on direct business partners (Tier 1) in the supply chain. Indirect partners only need to be included if the company has specific knowledge of potential risks.
• Raising of thresholds: The directive now only applies to a very small proportion of companies, as the thresholds have been raised significantly. EU companies with more than 1,750 employees and global net sales of more than €450 million are affected.

The aim of these changes is to relieve companies, especially SMEs, of excessive bureaucracy (“simplification”). Final agreement on the “Omnibus” package containing these changes is expected after the upcoming trilogue negotiations between the EU Parliament, Commission, and Council.

Will reporting on greenhouse gas reduction still have to be based on scientific targets?

Yes, the basic obligation to report on greenhouse gas reduction remains under the CSRD. The changes proposed by the EU Parliament mainly concern the deadlines and scope of application, not the core content of climate reporting for the companies concerned.

• CSRD (sustainability reporting): The specific ESRS E1 (climate change) standard is mandatory for all companies covered by the directive and requires the disclosure of Scope 1, 2, and 3 emissions, the steps taken to reduce them, and the targets for emission reduction. These targets are also expected to be consistent with scientific findings and the Paris Climate Agreement, which aims to limit global warming to 1.5 degrees Celsius.
• CSDDD (supply chain due diligence): The directive also requires affected companies to draw up a climate plan that is consistent with the goal of climate neutrality and the 1.5-degree limit of the Paris Agreement.

Although reporting is to be simplified overall and the deadlines are being postponed, the requirements for transparency and the setting of scientifically based climate targets remain a central component of EU regulations.

Which software products are suitable for small and medium-sized enterprises to create a report themselves?

For medium-sized companies that want to create their own sustainability reports, there are various ESG and CSRD software solutions that are specifically tailored to their needs. These tools are designed to simplify and automate the process of data collection, analysis, and reporting. Choosing the right software depends on individual requirements, budget, and data complexity. Here are some examples that are suitable for medium-sized companies:

• Specialized ESG and CSRD tools: Many providers offer affordable, tiered pricing models and features tailored to SMEs. These tools often provide automation for data collection and help with CSRD compliance, including ESRS.
• VSME tools: For companies that are not yet directly covered by the CSRD but still want to produce a sustainability report (often as part of the “trickle-down” effect from business partners), there are tools based on the voluntary standard for SMEs (VSME) . These are compact and tailored to the real capabilities of smaller companies.
• German Sustainability Code (DNK) Platform: The DNK offers a free platform financed by the Federal Ministry for Economic Affairs and Climate Protection. It serves as a user-friendly companion and guide to reporting and helps to easily meet the requirements of the CSRD.

Important criteria when selectiing software

When selecting software, small and medium-sized enterprises should pay attention to the following points:

• Automation: The software should largely automate data collection and processing in order to minimize internal effort.
• User-friendliness: An intuitive interface is important, as reporting is often carried out by employees who are not sustainability experts.
• Regulatory compliance: The solution must ensure that all relevant ESRS requirements are covered.
• Scalability: The software should be able to grow with the company in case requirements increase in the future. Conversely, large family offices or complex financing structures that encompass several companies should set requirements for fulfilling reporting obligations. Here, it is important to address the challenges posed by the different characteristics of associated companies. It is advisable to establish the requirements only after a materiality analysis. As long as this is not possible on a top-down basis, we recommend that companies continue their VSME or ESRS reporting in the usual manner.

Ultimately, the aim is to find a solution that reduces effort, minimizes errors, and enables accurate and transparent reporting.

What clarifications still need to be made regarding reporting on social, biodiversity-related, or other goals?

The German Federal Association for Sustainable Business (Bundesverband Nachhaltige Wirtschaft e. V.), along with other associations, is calling for clarity in reporting and transparent rules on when certain aspects of reporting may be omitted. Against this background, we recommend that individual reporting should not be reduced compared to the previous year under any circumstances, as otherwise it will not be possible to document improvements in the data series until clarity has been established. Reporters should continue to follow the existing ESRS framework. The BNW e. V. statement can be found here.

Source – European Parliament Press Office.