CSRD wiki - what to expect in 2025

A recap: what is the CSRD?

The CSRD builds on its predecessor, the Non-Financial Reporting Directive (NFRD), and dramatically expands the scope of sustainability reporting. It mandates companies to disclose detailed information on their environmental, social, and governance (ESG) practices, moving beyond the basics of financial performance.

The directive introduces European Sustainability Reporting Standards (ESRS), a standardised framework that ensures consistency, comparability, and reliability in ESG data across sectors and borders.

Key changes taking effect in 2025

1. Widened scope

Under the CSRD, the number of companies required to report grows exponentially. By 2025:

• Large companies: Those with 250+ employees, €40M+ in turnover, or €20M+ in total assets will need to report for the 2024 fiscal year.

• Listed SMEs: For the first time, many small- and medium-sized enterprises listed on EU-regulated markets will also be included, with some transitional provisions to ease the shift.

2. Double materiality

Companies must assess their impact through the lens of double materiality:

• Financial materiality: How sustainability matters affect the company’s financial performance.

• Impact materiality: How the company’s operations impact people and the planet.

This shift ensures that reporting captures a more holistic view of sustainability performance.

3. Assurance requirements

Gone are the days of unverified sustainability claims. Starting in 2025, companies will need to obtain limited assurance for their ESG disclosures, adding a layer of credibility and rigour to their reports.

4. Integration with EU taxonomy

The CSRD dovetails with the EU taxonomy for sustainable activities, requiring companies to report the alignment of their operations with criteria for sustainable economic activities.

What this means for businesses

For companies already immersed in sustainability reporting, the CSRD is an opportunity to streamline processes and align with a robust regulatory framework. For those new to the landscape, it’s a wake-up call to invest in tools, expertise, and strategies for capturing, analysing, and reporting ESG data.

2025 is a pivotal year because it marks the beginning of tangible consequences for non-compliance. Companies that fail to meet the directive’s requirements risk financial penalties, reputational damage, and a competitive disadvantage in an increasingly sustainability-driven market.

Preparing for 2025

At Atmoz, we see the CSRD as a catalyst for meaningful change. We’re helping businesses of all sizes navigate this transition by:

• Simplifying carbon accounting to comply with the ESRS requirements.

• Offering robust tools for capturing and visualising environmental metrics.

• Supporting SMEs as they tackle reporting challenges for the first time.

The CSRD isn’t just a compliance exercise-it’s a chance to align your business with the values of tomorrow’s consumers and investors.

As the directive takes full effect in 2025, companies that embrace these changes will find themselves better equipped to thrive in a rapidly evolving business landscape. Ready to get started? Let’s make 2025 the year of sustainability leadership.