The Corporate Sustainability Reporting Directive (CSRD) has significantly increased the demands placed on sustainability reporting by companies. Many organizations are currently faced with the question: What does CSRD actually mean – and what is the omnibus procedure all about?
This article provides an understandable introduction to the basics, classifies key terms and shows why there is a need for action, even if not all details have been finally clarified.
What is the CSRD – and why does it affect so many companies?
The CSRD is an EU directive that obliges companies to report comprehensively, comparably and verifiably on sustainability. The aim is to integrate environmental, social and governance (ESG) aspects more strongly into business decisions and external transparency.
Compared to previous regulations (e.g. NFRD), the scope of application is significantly wider:
- more companies subject to reporting requirements
- deeper content requirements
- Stronger auditing and documentation obligations
CSRD is therefore no longer just a reporting issue, but touches on management, processes, IT and governance.
The omnibus procedure: Why the rules are evolving
The so-called omnibus procedure describes adjustments and bundling of regulatory requirements at EU level. The CSRD and the associated ESRS (European Sustainability Reporting Standards) are also affected by this.
For companies, this means
- The objectives and structure of the CSRD are clear
- Detailed designs continue to evolve
- Individual requirements are specified or sharpened
Despite this dynamic, the implementation obligation remains. Waiting is therefore not an option – what is needed is a pragmatic approach to uncertainty.
Key terms briefly explained
Double materiality analysis
Companies must evaluate:
- Impact materiality: What impact does the company have on the environment and society?
- Financial materiality: Which sustainability issues have an impact on the financial situation?
This analysis forms the basis for the content of CSRD reporting.
ESRS compared to CSRD
The European Sustainability Reporting Standards (ESRS) specify the content that companies must report and how this information must be prepared. They define key figures, qualitative information, the structure and level of detail of sustainability reporting and make it comparable and verifiable throughout Europe.
The CSRD (Corporate Sustainability Reporting Directive), on the other hand, is the overarching legal framework. It determines who is obliged to report, when reporting is required and under what legal conditions. The CSRD therefore provides the legal framework, while the ESRS fills out this framework in terms of content.
In short: The CSRD requires reporting – the ESRS explain how it is to be implemented in practice.
Scope 1, 2 and 3
- Scope 1 – direct emissions: Emissions from own or controlled sources, e.g. from company-owned heating systems, production processes, emergency generators or the company’s own vehicle fleet
- Scope 2 – indirect emissions from energy: emissions from the generation of purchased energy, such as electricity, district heating, steam or cooling, which are used in the company
- Scope 3 – Emissions along the entire value chain: All other indirect emissions, e.g. from purchased raw materials, transportation and logistics, employee commuting, use and disposal of products or from upstream supply chains
Scope 3 in particular poses major operational challenges for many companies.
Why Scope 3 is so complex – and at the same time so relevant
Scope 3 emissions make up the largest part of the carbon footprint in many industries. At the same time, the relevant data is often outside the direct sphere of influence, for example at suppliers or logistics partners.
Typical challenges:
- Different data quality from suppliers
- Lack of standards and methods
- Manual surveys and approximations
In practice, it is clear that perfect data is unrealistic at the beginning. The decisive factor is a step-by-step, prioritized approach that creates transparency and can be continuously improved.
CSRD as an organizational and system issue
A common mistake is to view CSRD solely as a reporting project. In fact, it concerns:
- Existing IT and ERP systems
- Quality and management systems
- Roles, responsibilities and governance
A lot of CSRD-relevant information already exists – for example in purchasing, HR, compliance or energy management. The key is to bring this data together in a structured way instead of creating parallel isolated solutions.
Why early prioritization is crucial
Not all CSRD requirements can be implemented at the same time or are equally relevant. Companies that prioritize at an early stage,
- reduce operational complexity
- increase auditability
- create realistic implementation timetables.
The aim is not to ignore requirements, but to structure them according to risk, impact and feasibility.
Conclusion: CSRD needs structure instead of perfection
CSRD in the omnibus process does not demand perfect reporting straight away, but rather comprehensible decisions, robust processes and a clear implementation approach. Companies that understand sustainability as part of their management logic and build it up systematically create a stable foundation, even in an evolving regulatory environment.
How we support you
The Experts Institute supports companies in classifying CSRD and ESRS requirements, setting priorities and developing an auditable, practical implementation. Get ahead and in touch with us: info@expertsinstitut.de
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