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Sustainability is essential for the planet. The
2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now and into the future. European nations are also addressing these needs at a corporate business level. Introduced on 5th January 2023, The
Corporate Sustainability Reporting Directive (CSRD) is a significant EU regulation that will apply to over 50,000 companies in the EU. CSRD is aimed at enhancing and standardizing sustainability reporting across companies operating within the European Union.

CSRD mandates comprehensive disclosure of environmental, social, and governance (ESG) impacts by companies, and is designed to ensure transparency and accountability regarding, for example, energy efficiency, environmental and species protection, recycling, humane working conditions, and safety along the entire supply chain.

Building on the previous
Non-Financial Reporting Directive (NFRD), CSRD modernizes and strengthens the rules concerning the social and environmental information that companies must report.

The 50,000 companies covered by CSRD include small and medium-sized businesses (SMEs), to which the regulations will apply from January 1, 2026. As they have not had to compile these kinds of reports before, this may pose additional challenges for them. According to the
PwC 2024 Global CSRD Survey, only 63% of the companies concerned are confident that they are ready for CSRD, which also means that a third do not feel able to do so. However, those who do not comply with the standards risk not only fines but also the loss of business.

Potential changes to CRSD rules: ‘Omnibus’

Ultimately, the CSRD might impact just 10,000 companies, rather than the initially estimated 50,000. This is because, on February 26, 2025, the European Union submitted a
package of proposals (‘Omnibus’) that somewhat relaxes the complex CSRD regulations adopted to date.

If adopted, only companies with more than 1,000 employees and either more than €50m net turnover or more than €25m balance sheet would then be affected. This would also see the removal of 25% of the data points required along with simplified ESRS Standards. Additionally, the reporting obligations for companies currently within the scope of the CSRD that are required to report from 2026 or 2027 would be postponed by two years (until 2028). However, the proposal has not yet been enshrined in law and it is expected this will take another one to two years.

What are the CSRD reporting requirements?

Under CSRD rules, companies need to provide detailed information on:

  • Environmental matters including science-based targets and climate risk-related reporting,
  • Social matters and the treatment of employees,
  • Respect for human rights,
  • Anti-corruption and bribery, and
  • Diversity on company boards in terms of age, gender, educational and professional background.

Companies subject to the CSRD must report according to the
European Sustainability Reporting Standards (ESRS).

Is your organization subject to CSRD regulations?

Current CSRD legislation impacts almost 50,000, around three-quarters of businesses in the European Economic Area. In this overview, you can see whether you are required to report:

Company size

SMEs

Large companies inside the EU

Large companies outside the EU

Listed on the stock exchange

Yes

Not necessary

Not necessary

Amount of net turnover, assets and number of employees

Fulfillment of at least two of the following three criteria:

  • > €8 million net turnover
  • > €4 million assets

  • > 50 employees

Fulfillment of at least two of the following criteria:

  • > €40 million net turnover
  • > €20 million assets

  • > 250 employees

Fulfillment of the following two criteria:

  • > €150 million net turnover in the EU

  • Represented with at least one subsidiary or branch in the EU

If you meet all these criteria, you are required to report in accordance with the CSRD

Mandatory reporting from

January 1, 2026*

January 1, 2024* for large companies already reporting under the NFRD

January 1, 2025* for large companies not currently subject to the NFRD

Large companies need to consider information at the subsidiary level.

January 1, 2028*

* Companies are required to report from January 1 of the year in question; the first report is due early of the following year

CSRD – not only obligations but also benefits

As well as meeting legal requirements (and avoiding fines or reputational damage from non-compliance) there are many benefits to businesses implementing effective CSRD/ESG reporting.

Gaining competitive advantages: Companies must demonstrate a sustainable and clean supply chain and preferably select partners and suppliers that enable them to report this seamlessly. CSRD gives a reliable measurement of a business’s performance which is beneficial to building and maintaining relations with partner companies that must also demonstrate their sustainability credentials and prove their results aren’t ‘greenwashing’.

Optimize your own data management processes: Good CSRD/ESG reporting provides important insights into energy consumption, emissions, waste generation, recycling rates and other key figures – this also makes it possible to reduce costs in a targeted manner. This provides the ability to optimize your own processes, support planning, and provide statistical analysis.

Strengthening image and market position: Sustainability reports are a good opportunity to communicate one's responsibility for people and the environment – this is well received by the public, politicians, and partner networks.

Helping your business better understand its sustainability impact: CSRD makes climate reporting a standard business practice and therefore enables companies to better understand their results and properly identify and manage risks. This enables them to take more concrete climate action, demonstrate that their plans are based on scientific parameters, and track their implementation.

Still large gaps in the implementation of CSRD reporting

As already mentioned above, the
PwC 2024 Global CSRD Survey 63% of affected companies say that they are ‘very or extremely confident that they will be ready to report under the CSRD – which at the same time means  that a third of companies do not feel to do so. Furthermore, the survey also shows that fewer than half have completed critical tasks. This includes confirming reporting options (39%), conducting a double materiality assessment (38%), and validating the availability of data (20%).


BARC's ‘The State of ESG and Sustainability Reporting’ study shows that the European Sustainability Reporting Standards (ESRS) are used by 68% of companies. However, the BARC’s research also shows there are challenges to using ESRS – 42% of companies struggle with a lack of resources and the same proportion face challenges dealing with multiple data sources. 38% also have data quality issues. 60% of those surveyed felt there was potential for improvement in data and KPIs.

This shows the large gaps that still exist for companies to fulfill their CSRD requirements, even though there is less than a year left to do so. It is therefore high time that companies subject to reporting requirements address this issue and perhaps even seek external support.

Using AI for effective data collection for CSRD reporting

The most obvious way to compile CSRD reports is to manually collect data and collate it into ESRS-compliant reports for CSRD. This of course is time-consuming and open to human errors.

Another option for doing this is using AI-powered systems that can mine data from different sources – for example analyzing texts, databases, protocols, lists, invoices, e-mails, and much more information from all areas of the company. This means that key figures such as waste volume, energy consumption, or equal pay are available without much effort – up-to-the-minute and in high data quality.

Using AI for CSRD has a number of benefits:

Data collection and integration: By automating the collection of large volumes of data from various sources and formats, AI tools ensure a smooth and efficient reporting process by centralizing all necessary data in one location.

Data analysis and insights: AI can analyze the collected data to provide qualitative insights and identify trends. This helps organizations understand their sustainability performance and make informed decisions.

Automation of reporting processes: AI can bring greater automation to the reporting processes, reducing manual efforts and ensuring accuracy. This allows organizations to focus on deriving meaningful insights rather than spending time on manual data tasks.

Compliance and standardization: AI can help organizations comply with various sustainability reporting frameworks, including CSRD, by organizing and normalizing data according to the required standards.

Enhanced reporting quality: AI-powered tools can ensure consistent, high-quality output by automatically adjusting and validating data, reducing errors, and improving the overall quality of sustainability reports.

Scalability: AI enhances scalability for ESG reporting, relieving companies from starting anew each year. The flexibility of AI tools enables organizations to skillfully manage the evolving sustainability landscape within a constantly changing regulatory environment. This adaptability ensures a scalable and future-ready approach, allowing seamless growth and evolution.

How can Konica Minolta help with your CSRD reporting requirements?

CSRD requires regular reports with accurate and up-to-date standardized key figures and verifiable information, which can cause some SMEs headaches – where are these figures supposed to come from suddenly if you have never collected them before? Even businesses that collect sustainability figures often compile them manually in Excel files – which can be very time-consuming and error-prone. Conventional ESG reporting can take days or even weeks or months due to the complexity of gathering and unifying information from different sources.

If your company is not yet ready to meet the CSRD reporting requirements, don't worry. Konica Minolta can help you with this.

Our
ESG AI solution is based on AI and collects and analyzes all the information required for CSRD reporting, such as energy consumption, emissions, waste generation, recycling rates, and other key figures.

Data does not have to be in a uniform format or prepared in advance either, the AI analyzes texts, databases, protocols, lists, invoices, and much more information from all areas of your business using up-to-date and high-quality data.

The data can be integrated into existing ESG reporting tolls, but Konica Minolta's pre-built dashboards can also be used. They provide precise information at a glance, and on a daily basis, via an intuitive and structured user interface. Complex data becomes easy to understand, with graphs, charts, and data visualization enabling true business transparency, which is perfect for monitoring ESG performance and completing CSRD reporting.

The solution saves your employees time and avoids errors that can occur when collecting and evaluating data manually. It also takes into account all departments and business processes, and ensures high data quality, with compliance with all CSRD standards and deadlines.

By eliminating the need for data management, ESG managers can concentrate more on their core tasks such as regulatory compliance and implementing sustainability measures.

Companies can also use the analyses to analyze and reduce their resource consumption.

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