What Do I Tell My Boss About #CSRD and the EU’s Rollback of ESG Reporting?

Sustainability circles have been aflame for weeks about the European Commission Omnibus review. Leaks, gossip and outrage have swirled about potential rollback of the EU Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), the EU Taxonomy etc.

Yesterday the final proposal dropped, and it’s going to change a LOT of sustainability/ESG teams’ lives and plans this year, next year and through to 2030. If you’ve secured headcount, budget and plans for CSRD/CSDDD, then you need to be ready with some answers to hard questions about ‘what’s next’.

Since the CSRD was proposed, it’s become the headache/obsession/focus at the center of many Chief Sustainability Officers’ worlds.

And every CSO, Head of ESG and other CSRD leader has pushed to land the headcount, audit and consultancy budget to scale their mountain of compliance. In my experience, they’ve often secured those resources in the face of Boards and bosses unhappy at the spend and cynical about the value of compliance.

This isn’t an article about the rights and wrongs of these changes to EU transparency requirements – nor the wider political/future implications (I’ll write that later). This is some very practical advice on navigating the internal politics you’re going to face.

Futerra doesn’t have skin in this game, as we don’t offer reporting services. But we do work on sustainability innovation, leadership strategies, staff learning, trend analysis, and messaging/communications. Today, I’m worried about my corporate friends who have plugged away for the past years, convincing their boss that CSRD/CSDDD is needed, and might be about to have some hard conversations and threatened resources.

When your boss asks: ‘What has just happened to CSRD? Do we still have to do it?’ What the hell is the EU doing?’ – be ready with some facts.

It’s important to remember that this review was prompted by the hugely influential, Draghi report, which was published in 2024 and set out major ways the EU can spark a productivity revolution. One big recommendation was to reduce the compliance loads on business. That wasn’t exclusively about CSRD or designed to generate a frustrating process.

One thing to remind your bosses is that the EU is a political entity, and the various EU nations have faced elections which have affected this whole process. We don’t expect reasonable, consistent and unchanging processes from other governments (ahem, USA) so plan for political driven instability in EU rules too.

Rather faster than usual, the EC rolled out a review of CSRD and other transparency requirements in response to Draghi. Yesterday, the outcome of the review: the Omnibus Simplification Package, finally dropped. This package proposes changes the EU should consider:

On CSRD, the proposals are:

+ CSRD should only apply to companies with over 1,000 employees and €50-plus million in annual turnover or a balance sheet over €25m – reducing the number of companies in scope by an estimated 80%.

+ All those thousands of businesses now out of scope can report voluntarily.

+ For large companies in the Wave 2 and 3, their reporting is postponed while this all gets sorted out. That includes some very big names who operate in, but aren’t listed in, the EU.

+ Sector specific guidance won’t happen.

+ The number of data points will be reduced for those companies still required to report – but we don’t know exactly which data points are in/out yet.

+ Double materiality is still happening, as is XBRL tagging.

+ Only limited assurance (which is cheaper) will be required; the more in-depth (and expensive) ‘reasonable’ audits are off the table.

+ Large companies can’t ask their small suppliers for too much data.

On CSDDD:

+ Pushed out until 2026.

+ Only reviewing tier one suppliers – not further down the chain unless significant impacts from indirect partners are identified.

+ Moving from annual assessment to every 5 years.

+ Climate Transition Action Plans are still in.

Your lawyer will give you a MUCH more detailed and specific insight than these few bullets – including on the EU Taxonomy and other topics included in the Omnibus. And remember that, technically, we’re in a grey area of ‘proposed change’ right now, with the former rules still standing, but with a near guarantee that these big changes will happen.

That depends on where you are in the CSRD journey. But all three of the following scenarios could help you hold onto headcount and budget, and continue to make an impact on the sustainability issues that matter.

Scenario 1: You’ve done most of the work to prepare your CSRD, and are almost ready to publish?

You’ve been sweating on a CSRD-compliant report (or ‘test year’ version) for ages and you’re well down the track. My recommendation:

+ Wave 1 companies still in scope for CSRD in 2025: PUBLISH (because you have to)

+ In a category no longer in scope for CSRD or delayed: PUBLISH (because you’ve done all the work)

What’s the point in wasting all that work? And publishing might generate enough value to convince your boss to maintain the CSRD infrastructure going forward.

Plus, if you’re a household name brand and all your peers publish theirs, will you be notable by your absence?

But don’t just fling your CSRD out into the world and hope for the best. Prioritize your internal audience too. Have a big internal ‘thank you’ campaign for everyone who worked on data or action, to remind them why their sustainability efforts matter. Focus on what the company has learned, highlight your impressive cross-team collaborations, celebrate new ideas the report uncovered, and the all-round excellent training the process provided. Squeeze out every drop of added value to prove to your boss this hasn’t been a waste of resources.

Do this – but also prepare a ‘what’s next’ plan for your boss (see Scenario 3). Armed with the evidence of how your sustainability efforts on CSRD have benefited the team and the company, get ready to wow your CEO with what you’ll do next.

Scenario 2: You’ve started working on CSRD, but are months from being publication-ready, and now you’re in the 80%?

Over 50,000 companies are in this boat as of today. You’re either below the headcount/finance requirement or you’re a Wave 2/3 company – that’s 80% of the companies who were formerly in scope for a CSRD report this or next year.

You’ve got a harder job if you’ve secured budget and headcount because ‘CSRD is a firm compliance requirement’ and now your company is no longer in scope, or you don’t need a CSRD report until 2027/8. Or if you’ve said, ‘Our customers will require CSRD’, when the EC has now said the biggest companies can’t demand that of their suppliers.

You have two options to tell your boss; either do CSRD (or the forthcoming VSME voluntary version) anyway or do something else (maybe more valuable) instead.

There are still advantages to voluntary reporting, especially now the pressure is off. You can loosen your deadlines, dampen the frenzy, and take your foot off the spending gas when it comes to auditing. That means your reporting can be more focused on meeting internal needs than external demands. If you want to fight to keep doing it, make sure you’re pulling out that added value beyond compliance!

But many of those 50,000 companies simply aren’t going to continue the spend and time on CSRD if they don’t have too. In fact, if the internal chats I have with Futerra clients are anything to go by, many bosses will drop CSRD like an expensive and burdensome rotten apple.

If your boss is already cynical about CSRD then be ready to pivot HARD into other sustainability activities. Maybe even share that ‘these are the things we wished we had the time and budget to do, but CSRD was in the way’.

I’m sorry if this sounds harsh to CSRD advocates. But compliance is just one part of corporate sustainability, and we can’t let these rule changes threaten everything else.

See Scenario 3 for exciting options beyond CSRD. You MUST have a clear, valuable, costed and exciting Plan B ready, otherwise you’ll lose your headcount and budget for this and next year.

Don’t delay or take months to plan out these alternatives and new plans. Instead, show you have the leadership, entrepreneurship and market insight to use your CSRD budget/time for other high impact/high return activities.

Scenario 3: Never wanted to do it anyway, and now you don’t have to?

You’re in the 80%, or Wave 2/3, and you’d been dragging your feet on CSRD anyway, or maybe you were trying to get another department to take it on?

While transparency matters, that’s not why you got into corporate sustainability. You were horrified when you read that 50% of CSOs are spending most of their time on compliance – mainly CSRD. And last year’s IBM study that found companies are spending more on sustainability reporting than they are on sustainability innovation confirmed your worst fears about compliance over creativity.

Dropping CSRD feels like freedom from a ball and chain, and now you can see real impact, future-focused action and fewer spreadsheets in your future.

When your boss comes to you to talk budgets and headcounts, be buzzing with excitement about what you’re now able to do instead of CSRD. Remind them that sustainability is entrepreneurial business: analysis from the CBI has just found that the net zero economy is growing three times faster than the overall UK economy.

Make it clear just how ready you are to pivot towards more business-relevant sustainability action:

A. Share your plans to double down on product innovations that support sustainability while offering real, relevant consumer benefits – like lasting longer, lowering energy bills, or replacing high-carbon alternatives.

B. Describe how the expert team you have hired, with deep technical knowledge, can now be redeployed in exciting ways. They can start grappling with fascinating innovation topics like Spheres of Influence, which identify your business’s biggest and broadest impacts through product, portfolio and policy.

C. Put together a groundbreaking Climate Transition Action Plan (CTAP) – an altogether more usable and compelling way to talk about what you’re doing on climate than a standard sustainability report. CTAPs are forward-looking and create a digestible plan that customers and employees alike can rally around.

D. Map out what your continued sustainability efforts for staff engagement are – bearing in mind that as many as 40% of Gen Zs and Millennials say that they already have, or plan to, change jobs due to climate concerns. Show how you’ll involve people from across teams, and lead initiatives that mean something to the people you work with.

Contact Futerra for actionable ideas on these, and impact strategies that are ready to go.

Now more than ever, your job as a sustainability leader is to keep momentum up. The climate crisis isn’t slowing down, so neither should our work. The business case for sustainability is as strong as ever – it’s your job to convince your CEO that reducing regulatory requirements just means more budget for sustainability activities that will support the business.

You’re likely to see some rising panic in the corporate sustainability community, especially from those who have staked their career on CSRD. Resist the urge to join them; instead, choose planning over panicking. As ever, the sustainability landscape is changing in front of our eyes – and, as ever, we move with it.

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