The EU’s changing regulation on sustainability reporting confuses companies

The proposal is now progressing rapidly in the EU, and decisions are expected by the end of the year. At the moment, companies can only guess at the outcome of the negotiations.

At the beginning of March, Bravura conducted a survey that charted companies’ experiences with CSRD reporting. The respondents included both first-wave reporters and SMEs companies, most of which had started preparing their reporting. In the respondents’ opinion, the requirements of the Directive and the ESRS standard supporting it were high, and challenges were caused by, among other things, familiarising themselves with the standard and interpreting it. Launching the reporting also took a considerable amount of time and costs were incurred by companies in addition to their own work input, as well as the fees of advisors and certification authorities.

Opinions were divided on the effectiveness of the Sustainability Reporting Directive, and more than half of the respondents felt that its benefits were minor or non-existent. Another concern was that stakeholders have not shown interest in more extensive sustainability information. Extensive sustainability reports are often overlooked. Reporting was also seen as taking the company’s resources away from sustainability measures.

The reporters in the first phase consisted of large listed companies, most of which have previously published free-form sustainability reports. The situation is more challenging for SMEs, the majority of which had started preparations before the Omnibus proposal was published at the end of February. According to the proposal, the reporting obligation for SMEs would be abolished, and reporting would be voluntary. Based on the survey, most of them have been left waiting for the legislation to change.

The Omnibus proposal is probably based on feedback from European companies about the unreasonable reporting burden. Of course, the EU’s U-turn does not strengthen its credibility; however, on the other hand, the rapid correction of the mistake shows that the Community is also capable of making quick decisions. Sustainable development is a prerequisite for the future and must be promoted through practical measures. Reporting also plays an important role, but in the face of global challenges, action is urgently needed – the reporting clocks can be stopped.

The results of the survey were published at a breakfast event organized by Bravura and Nordic Impact on June 10, 2025, where excellent examples of companies that have developed their competitiveness through sustainability measures were also presented.

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