As we move into the later part of the year, some large organisations that operate in the European Union (EU) will now be required to report under the Corporate Sustainability Reporting Directive (CSRD). This landmark regulation is designed to completely reshape how companies disclose their environmental, social and governance (ESG) impacts, raising the bar for transparency, data accuracy and assurance. From 2025, companies previously subject to the Non-Financial Reporting Directive (NFRD) with more than 500 employees, €50 million turnover and a balance sheet of more than €25 million must comply with the CSRD requirements. Yet, despite the looming deadlines, many organisations are still in the early stages of preparing for CSRD reporting, risking last-minute scrambling, incomplete disclosures or even non-compliance. To effectively navigate the full implementation of the CSRD, it is important to first understand what has changed in its scope, timeline and how to prepare your organisation for compliance.
What’s Happening with the CSRD?
The corporate sustainability reporting directive entered into force in January 2023, but by February 2025, the EU had introduced its Omnibus Sustainability Package, which aims to simplify sustainability reporting in the EU, particularly for small businesses. Note that these changes are not yet final, and current CSRD rules still apply until the new thresholds become law. A separate decision has delayed reporting deadlines for some companies by up to two years, but that extra time is best used to prepare, not pause.
The criteria for inclusion under the CSRD are tightened. Compliance will now only be mandatory for:
- Large enterprises with over 1,000 employees, and either a turnover above €50 million or a balance sheet exceeding €25 million.
- Non‑EU companies with at least €450 million EU turnover, plus either a qualifying subsidiary or a high‑turnover branch in the EU.
- Smaller companies now have the option to adopt a Voluntary SME (VSME) Reporting Standard, rather than being compelled to follow the full CSRD requirements.
This streamlined overview sets the stage for organisations to understand how the evolving CSRD updates impact their reporting strategies and the importance of being proactive to avoid non-compliance.
Learn More: Updates on CSRD in 2025
Mistakes to Avoid When Preparing for CSRD Reporting
Some organisations might see these changes as a reason to pause their preparations. But for many in high-impact sectors, preparing for CSRD reporting still requires time, resources and strategic planning. Here are common mistakes made when preparing for CSRD reporting, why they occur and how to avoid them:
Misjudging the New Scope
Under the revised criteria, many medium-sized firms will no longer be required to report. However, companies should not assume they are unaffected:
- Non-EU groups with high EU sales may still qualify.
- Investor and customer expectations for ESG transparency often exceed legal minimums.
Some organisations think that if they are not EU-based, they are exempt. However, non-EU companies with annual EU turnover above €150 million and an EU branch or subsidiary above certain thresholds will still be in scope.
With regards to medium-sized firms, the EU Commission has introduced a voluntary reporting standard for smaller firms seeking to demonstrate their sustainability performance to stakeholders. This will contribute to their sustainability strategy and serve as evidence of their commitment to reducing their environmental impact. It’s advisable to conduct a fresh scope analysis against the Omnibus thresholds and consider voluntary alignment if market access or financing depends on ESG performance.
Our free CSRD Checklist helps you find out where your company falls within the CSRD scope and how to prepare for compliance.
Delaying Double Materiality Because of Timeline Extensions
With deadlines pushed back for many organisations, there can be a temptation to postpone the Double Materiality Assessment (DMA). DMA ensures companies assess not only how sustainability issues impact their business (financial materiality) but also how their business impacts people and the environment (impact materiality). Delaying DMA is very risky because:
- It’s still the foundation for CSRD reporting.
- It can take months to gather the internal and value chain data required.
Start your double materiality assessment as the first step in preparing for CSRD reporting. Involve cross-departmental stakeholders in sustainability, finance, operations, HR and engage suppliers early to identify upstream and downstream impacts. You can work with third-party sustainability consultants to ease the process if internal capability is lacking.
Learn More: Double Materiality Implementation Guidance | Tunley Environmental
Overlooking Supply Chain Data
Data collection is often cited as the most time-consuming part of CSRD reporting. Even with simplified European Sustainability Reporting Standard (ESRS) datapoints, value chain data remains critical in areas like climate change (E1) and biodiversity (E4). Mistakes include:
- Focusing only on direct operations and ignoring upstream and downstream value chain impacts.
- Lack of data validation processes.
- Incomplete historical data, making trend analysis and year-on-year comparisons impossible.
- Not engaging suppliers until late in the reporting process.
Companies preparing for CSRD reporting should begin supply chain mapping and supplier engagement early to meet assurance expectations.
Not Tracking CSRD Updates Closely
The delegated act to revise ESRS could still change reporting requirements further.
Recommendations:
- Assign an internal “CSRD lead” to monitor updates.
- Subscribe to official, verifiable and credible sustainability channels.
- Attend expert sessions hosted by sustainability experts.
- Work with trusted third-party consultants to ensure accurate compliance with the CSRD requirements
Navigating CSRD: What’s Changing and How to Get Ready
Join our upcoming webinar on the Corporate Sustainability Reporting Directive (CSRD). It will be an engaging and informative session hosted by trusted sustainability scientists from various fields relevant to CSRD reporting. We'll go over what the CSRD means for you, what the environmental reporting requirements are and how you can begin preparing in this webinar. We will also discuss how Tunley can help you along the way.
Date: September 11th, 2025
Time: 16:00–17:00 BST
Location: Microsoft Teams
Register here: Navigating CSRD: What’s Changing and How to Get Ready
The Bottom Line
While many businesses understand the urgency of preparing for CSRD reporting, fewer are fully prepared for the scope and complexity involved. The narrowed scope, delayed timelines and simplified standards do not remove the need for robust ESG data systems, value chain transparency and effective double materiality assessments. For companies that remain in scope and for those indirectly impacted through supply chain or investor requirements, early preparation is still the best defence against compliance risks and reputational damage.