CSRD, GRI, or VSME

EU sustainability reporting regulations have sparked debate during the past reporting period regarding inconsistencies in their guidelines.

As of 2017, there were approximately 11,000 companies in Europe reporting under the NFRD. When there was a desire to raise reporting requirements and expand the scope of application, the Corporate Sustainability Reporting Directive (CSRD) was established, covering over 46,000 companies. However, this overly ambitious requirement met with resistance, so the EU decided to scale back the regulation. Now, following the Omnibus package, the sustainability reporting requirement applies to fewer than 5,000 companies. The number of companies has shrunk to less than half of the original figure, even though the goal was the opposite.

The rapid changes in regulation have caused headaches and frustration among both reporting companies and the consultants providing services. In Finland, the amendment to the law is still awaiting approval by Parliament, so during this spring a large number of companies have had to prepare sustainability reports knowing that the requirements will eventually be removed. The change has been most evident among auditors, who rushed to train sustainability data auditors just over a year ago. Now there is less need for these new certifications.

Despite the Omnibus, sustainable development will not come to a halt, nor will sustainability reporting disappear. It may even be the case that companies will redirect the resources previously spent on excessive reporting toward their sustainability initiatives. Less talk and more action.

There are now many reporting frameworks available, and companies not subject to the legal obligation can choose the one that suits them best. With the Omnibus, the ESRS reporting standard was also streamlined, as the number of data points was halved. Thus, the CSRD is a more attractive option than before, even for those outside the scope of the legal obligation. The VSME is the EU’s voluntary sustainability reporting standard, which has reasonable data requirements and allows reports to be tailored to stakeholders’ information needs. The third option is GRI, which was previously the most widely used standard; its international recognition makes it particularly attractive for companies whose markets are primarily outside the EU.

Our team at Bravura is familiar with all of these frameworks. We have been publishing GRI reports for a long time and CSRD-compliant reports for the past two years (read more about our Corporate Responsibility Services). We produced our first VSME report this year, and our experience is that the latest framework is particularly well-suited for companies just starting their reporting.

The reporting period is coming to a close, but we’re already planning the next one. If this topic is relevant to you, please get in touch.