What you need to know to start reporting on CSRD from 2025 onwards

Starting January 1, 2025, the Corporate Sustainability Reporting Directive (CSRD) will expand its scope, becoming mandatory for around 39,000 additional companies across Europe.

If your company is one of them, the time to act is now. CSRD compliance is a complex, time-consuming process that requires careful planning and execution, and the stakes couldn’t be higher. Not only can non-compliance lead to some hefty fines, but it can also harm your company’s reputation and strain relationships with stakeholders. 

Attempting to manage CSRD reporting manually in spreadsheets adds another layer of risk, with errors and compliance gaps more likely. Effective preparation isn’t just about meeting legal requirements—it’s about positioning your business for success in an increasingly sustainability-focused world.

89% of investors now factor environmental, social, and governance (ESG) criteria into their decisions. Consumers are willing to pay nearly 10% more for sustainably sourced goods. And 67% of employees prefer to work for environmentally conscious companies. This shows sustainability is no longer just a “nice-to-have” but an essential component for long-term business success. 

This article will offer a crash course on how to prepare for the CSRD from 2025 onwards. We’ll also touch on how sustainability management and compliance software can streamline CSRD compliance, improve accuracy, and fast-track the reporting process. 

Quick recap: Who does CSRD apply to?

The CSRD is being rolled out gradually based on company size, turnover, and location. Here's a breakdown of the timeline and criteria:

2024: Large companies already subject to the NFRD

On January 1, 2024, the directive came into effect for around 11,000 companies already subject to its predecessor, the Non-Financial Reporting Directive (NFRD). These companies will submit their first reports under the CSRD in the 2025 financial year.

2025: Large companies

In 2025, mandatory sustainability reporting will kick in for more European companies than ever before. Large enterprises that meet any two of the following criteria must comply with the CSRD, with their first reports due in 2026:

• 250+ employees
• €50+ million in net turnover
• €25+ million in assets

2026: Listed small and medium-sized enterprises (SMEs)

In 2026, the CSRD will expand further to listed SMEs, with their first reports due in 2027. This includes smaller companies meeting any two of these thresholds:

• Small companies: 50–249 employees, €10–50 million turnover, €5–25 million in assets
• Micro companies: 10–49 employees, €900,000–€10 million turnover, €450,000–€5 million in assets

2028: Large non-European companies

Finally, in 2028, non-European companies with significant operations or market listings in Europe must comply with the CSRD with first reports due in 2029.

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What the CSRD’s 2025 mandate means for your business

The 2025 deadline for the first batch of companies subject to CSRD compliance marks a significant milestone in the journey toward transparent sustainability reporting. Around 11,000 companies will publish their first CSRD-compliant sustainability reports, which will have all passed through limited assurance audits.

These reports will offer a wealth of insights and set a benchmark for businesses navigating the complex requirements of the CSRD. Here’s what we anticipate learning from these first reports:

1. More clarity on EFRAG guidelines

Despite the European Financial Reporting Advisory Group (EFRAG) providing detailed guidelines on how to tackle the European Sustainability Reporting Standards (ESRS)—the guiding framework for the CSRD—many businesses still face challenges interpreting them due to their complexity. 

In fact, 83% of companies find collecting accurate data to meet CSRD requirements a significant challenge, and 29% of companies feel unprepared for ESG data audits. 

The publication of the first reports in 2025 will provide real-world examples of how companies have interpreted and applied these standards, helping to demystify gray areas and create practical precedents.

2. Useful best practices

These reports will reveal how leaders across industries are addressing sustainability disclosures. From how they approach double materiality assessments to the depth of climate-related disclosures and social governance considerations, we’ll gain valuable insights into what works—and what doesn’t—in CSRD reporting.

If you don’t have time to wait for the first reports to come out, take a look at some standout examples of CSRD reports we’ve collected that are making an impact by going beyond compliance.

3. Industry-specific approaches

The diversity of businesses subject to the CSRD means we’ll see sector-specific interpretations of the guidelines.

While sector-specific ESRS reporting standards and disclosures for non-EU companies aren’t expected until June 30, 2026, these first interpretations should help businesses tailor their sustainability strategies and reports to align with what could be expected in their particular industry—paving the way for more standardized reporting in the years to come.

4. Lessons from the limited assurance audits

The first set of CSRD-compliant reports will also provide a look at how auditors are applying limited assurance processes. This will inform companies still preparing their reports about potential audit pitfalls and the level of scrutiny to anticipate.

5. Challenges and opportunities for SMEs

For smaller businesses that fall under the CSRD mandate in later years, the 2025 reports will act as a trial run of sorts. They’ll offer a chance to learn from the successes and shortcomings of larger organizations, providing a clearer roadmap for their own compliance efforts.

Questions to ask yourself to kickstart CSRD reporting

If you’re wondering how prepared you currently are for the CSRD, answering the following questions can give you more clarity on your level of CSRD-readiness and the next steps you need to take:

1. Does your company fall under CSRD in 2025?
   • Does your company meet the criteria for mandatory CSRD reporting in 2025 (more than 250 employees, over €50 million in net turnover, or assets exceeding €25 million)?
2. What are your current reporting practices?
   • Do you already prepare sustainability reports?
   • How aligned are your existing reports with ESRS?
   • What systems or processes do you have in place for collecting sustainability data?
3. What are your current sustainability targets?
   • Have you set measurable goals for ESG performance?
   • Are these targets science-based, backed by actionable plans, and how are you tracking progress?
4. Do you understand the CSRD requirements?
   • Are you aware of the general CSRD framework, including deadlines, reporting formats, and assurance needs?
   • What resources or teams do you need to meet these requirements?
5. How will you address general disclosures?
   • Have you prepared to meet ESRS 2 requirements for general disclosures, such as your company’s governance structure, business model, and sustainability policies?
6. What topic-specific disclosures are relevant to your business?
   • Have you conducted a double materiality assessment to identify the environmental (ESRS E), social (ESRS S), and governance (ESRS G) topics material to your operations?
   • What data will you need to collect for these topic-specific disclosures, and who will be responsible for managing it?

5 steps to prepare for the CSRD in 2025

Now that you’ve got a better idea of your readiness level, here are five practical steps to guide your company through the compliance process (before it’s too late):

1. Build your sustainability team and engage an auditor

Start by building or expanding your sustainability team to lead the CSRD compliance process. Depending on your company’s size, this may involve hiring or training professionals with expertise in sustainability reporting. This team will be responsible for coordinating the CSRD compliance process, from collecting ESG data to drafting audit-ready reports.

We recommend engaging an independent auditor familiar with the CSRD as early as possible. Auditors can provide guidance throughout the reporting process to keep your reporting on track and make sure it’s compliant with the latest standards.

2. Conduct a double materiality assessment

The double materiality assessment is the first step in the CSRD reporting process. It helps you to identify which ESRS sustainability topics should be included in your report. 

Start by identifying potential Impacts, Risks, and Opportunities (IROs), validate them with stakeholder input, and map them to the appropriate ESRS subtopics. Prioritize and score these IROs to establish which topics must be included in your report. This step ensures your business focuses on the most relevant, impactful issues.

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3. Align with the ESRS

Begin collecting data for all material topics identified in your double materiality assessment. Collaborate with departments like finance, legal, HR, and IT to gather accurate data points. 

Ensure that you also include ESRS 2 data, which covers general reporting processes and must be disclosed regardless of materiality. Proper alignment with ESRS ensures your report is comprehensive and compliant.

4. Draft and structure your report

Prepare your sustainability report by documenting how your double materiality assessment was conducted and what material topics emerged. Consider including a materiality matrix to visually summarize the results. 

Your ESRS sustainability statement should be a dedicated section within your management report, structured into four key areas in this order:

1. General disclosures (ESRS 2)
2. Environmental disclosures (ESRS E1-E5)
3. Social disclosures (ESRS S1-S4)
4. Governance disclosures (ESRS G1)

Organizing your report in this way ensures it meets CSRD requirements and is easy to follow.

5. Submit your report for audit

Before final submission, consider conducting a ‘dry run’ to identify and address any compliance gaps. This trial report can help ensure that your final submission is robust and ready for auditing. Once finalized, submit your report to an independent auditor. They will review your data, confirm compliance, and provide feedback if needed.

Using the right CSRD software puts you one step ahead

As you can see, CSRD compliance is no simple feat, and not something you can tackle last minute. From conducting double materiality assessments to collecting data for 1.100 potential data points and generating audit-ready reports, the process is both complex and time-consuming. 

Add looming deadlines, increasing demands for transparency from stakeholders, and the risk of hefty fines for non-compliance, and the stakes have never been higher.

The good news is achieving CSRD compliance doesn’t have to be overwhelming. That’s why many forward-thinking companies are turning to sustainability management and compliance software like Coolset to simplify and streamline the process. 

With Coolset, businesses can automate data collection, align team efforts, and generate audit-ready reports that meet CSRD standards in weeks, not months. By cutting down on manual work, Coolset reduces the risk of errors and ensures your business stays on track.

Ready to simplify CSRD compliance? Explore our interactive demo or schedule a free advisory call to see how Coolset can help you meet the 2025 deadlines with ease.

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