Reporting landscape 2025: outlook and in practice
The past year, or even the year before, companies started to prepare for upcoming reporting legislation and regulation. Maybe your company too. From developing the first Corporate Sustainability Reporting Directive (CSRD)-compliant report, conducting an EU Taxonomy alignment assessment to performing a Taskforce on Nature-related Financial Disclosures (TNFD)-analysis. Some widely known and some unknown.
This blog will give you an idea of what to expect in 2025 in terms of the CSRD, EU Taxonomy, GRI, ISSB and TNFD. And, a taste of what we experience in the field of sustainability reporting with regards to these frameworks.
Corporate Sustainability Reporting Directive (CSRD)
Listed companies, like Philips, AkzoNobel and Orsted are among, what we call, the first wave to publish a CSRD-compliant report. In a few months, we’ll keep our eyes peeled to see how they’ve done. We suggest you to do the same.
These organisations, and the second wave of organisations required to report under the CSRD (non-listed large companies), are in for a small ‘t(h)reat’ in 2025 too.
Outlook 2025
Sector-specific standards
Besides the regular European Sustainability Reporting Standards (ESRS), organizations are, eventually, required to follow the sector-specific ESRS standards. This is likely to count for, e.g., companies operating in the Mining, oil & gas, Road transport, and Textiles, accessories, footwear and jewellery sectors.
It’s unclear when final versions of these sector-specific standards will be published. Throughout 2025, via registration, organizations could obtain a sneak-peak of the initial draft of various standards. This could help them have an idea on what to expect. For more information on this multi-year exercise, please see here. The sector-specific ESRS-standards are expected to be published in summer 2026.
Omnibus
While aiming for more relevant information, such additional standards could feel like yet another reporting obligation. This is exactly the reason, or at least one of the reasons, why EU Commission President Ursula Von der Leyen announced the preparation of an omnibus on the CSRD, EU Taxonomy and CSDDD. This ‘simplification package’ is aimed at bringing the reporting requirements of those frameworks together. The proposal is expected to be published end of February 2025. Whether this omnibus will actually enter into force, is still to be seen. Nonetheless, given its potential for companies to reduce the work, it’s important to stay on top of it.
Transposition into Dutch law
In 2025, it is also expected that the CSRD will be transposed into national (Dutch) legislation. While the deadline for national implementation was in July 2024, many countries have not properly done so. This creates a lot of uncertainty on the legal obligations to produce CSRD-compliant sustainability sections in annual reports. Whether the 2025 transposition into Dutch law creates the legal obligation to report in hindsight, is still unclear. Therefore, and among other reasons, the AFM urges companies to still report as if they are already required to do so. Minister Heinen explains that the CSRD will be implemented in Dutch law in such a way that the legal act minimizes the burden on companies, sticking to text of the directive.
Sustainability assurance
The legal uncertainty extends to the limited assurance over sustainability reporting required by an established assurance-provider. The NBA, in its most recent position paper, advises auditors to take an ESRS-compliance oriented view regarding their assurance approach, while taking into account the qualitative characteristics of information mentioned in ESRS 1. This approach overruled the approach of auditors only assessing the true and fair view of the report.
In practice
Listed companies, large companies, and many others are trying to find their way in implementing the CSRD. As stated earlier, we should keep our eyes open on how companies communicate on this in their annual reports. Everyone is looking at each other.
So did we. We’ve seen a few ‘trends’ while putting CSRD to practice:
- Moving away from opinion-oriented to research-based double materiality assessments (DMA);
- When feasible, organizations with a similar sector are working together on/towards a sector-DMA;
- Create a so-called mock report before the usual start of the annual report process;
- Involving the auditor in an early stage of the journey; and
- Aligning data-infrastructure and internal control processes for sustainability/non-financial information to reporting processes for financial information.
Many companies tend to start working on their CSRD-journey, while following up with other legal frameworks, such as the EU Taxonomy, later on. Although we think it’s a good thing that companies work hard on their CSRD-compliance, several links with the EU Taxonomy exist, which can be quite a burden as well. Next to that, the Taxonomy can really serve as a steering instrument for certain types of companies. It’s commendable to not see the different sustainability frameworks as subsequent steps in a journey, but rather as a simultaneous flow of work.
EU Taxonomy
While the reporting obligation for the EU Taxonomy already exists for several years, it is only now that companies start to make their Taxonomy-assessments to include in their CSRD-compliant annual reports. The EU Taxonomy is an expanding legal framework that aims to categorize economic activities as ecologically sustainable, while linking that to a company’s revenues, capital expenditures and operational expenditures.
Outlook 2025
The European Commission regularly provides updates on the EU Taxonomy in so-called Commission Notices. These notices function like a FAQ-document, providing answers to burning questions regarding Taxonomy-interpretation and -implementation. Just last week, a new report outlining recommendations for the review of the Climate Delegated Act and additions of new economic activities to the EU Taxonomy has been published. These recommendations include proposed amendments to technical screening criteria, affecting the alignment phase of the Taxonomy-assessment.
In 2025, more of these recommendations for review and Commission Notices are to be expected, as the EU Taxonomy requires frequent scrutiny due to its complexity, interaction with other acts and frameworks, as well as its purpose to gain insight in state-of-the-art green activities at time of assessment.
In practice
As more companies start to perform eligibility and alignment assessments, you start to see similarities and differences between companies within the same sectors. It is interesting to see how one’s eligibility and alignment assessments compare to one’s peers, which can lead to a deeper dive in a company’s economic activities. However, the devil is in the details, and nuances in operational activities may give rise to deviating Taxonomy-assessments.
Next to that, due to the similarities in economic activities within a sector, we see more and more sector-based eligibility assessments, which gives a great starting point for companies performing their individual eligibility assessment of Taxonomy-activities.
Global Reporting Initiative (GRI)
The Global Reporting Initiative (GRI) continues to expand its global adoption, as worldwide the need and desire for sustainability reporting continues to grow. Since the arrival of the CSRD, companies sometimes let go of GRI-reporting. However, most international companies keep adhering to the GRI standards and there are good and effective ways to do this as there is a big overlap between GRI and the CSRD, as also shown by the mapping overview of disclosure requirements.
Outlook 2025 and in practice
An important challenge for GRI is to remain compatible with the CSRD reporting requirements. As more sustainability-related frameworks pop up and gain influence, including ESG-raters like CDP, GRI continues its efforts to align other sustainability reporting with the GRI reporting requirements. In 2025, it is expected that the Initiative continues to explore and expand its activities to streamline sustainability disclosures as much as possible. The sector-standards from GRI will also be the main input for the sector-specific ESRS-standards, so the role of GRI in the bigger scheme will still be quite meaningful. The guidance developed by GRI is also more insightful than the guidance provided by ESRS at the moment.
That said, we see a changing use of GRI at our clients. Already for the 2024 report, more companies start to lower their GRI-commitment and switch from reporting in accordance with GRI to reporting with reference to GRI. Due to the increased compatibility with the ESRS-requirements, reporting with reference to the GRI disclosure requirements will become easier in the near future. The GRI sector-specific standards can still be a great source of inspiration for disclosing entity-specific information not yet covered by the thematic ESRS-standards at this moment.
International Sustainability Standards Board (ISSB)
From 2024 onwards, the ISSB Standards took over the place of the TCFD in financial climate-related reporting. In turn, the ISSB adopted two sustainability reporting standards: IFRS S1 concerning general requirements for disclosures and IFRS S2 concerning climate-related disclosures.
Outlook 2025 and in practice
The IFRS-standards start to gain momentum throughout the world, as by March 2024 around 1000 companies referenced the standards in their annual report. However, due to the focus on CSRD in the European Union, the momentum swing from the well-known TCFD framework to the newer IFRS-standards has not fully landed yet. In 2025, as listed companies start to become more familiar with the CSRD, the incorporation of IFRS S1 and S2 in sustainability reporting may take off.
In line with this prospect, we also see that many companies continue to use the TCFD-requirements in their annual report. This can have multiple reasons. Stakeholders and investors might still expect TCFD-disclosures to populate the annual report. Next to that, companies may concentrate their efforts on CSRD-compliance, while still hoping to report meaningful information on their climate risk approach, favouring to continue the TCFD-disclosures. After all, the TCFD-disclosures were an important input for the climate-related disclosures of ESRS E1.
As the ISSB itself notices in its 2024 progress report, companies using ISSB Standards provide the information covered by the TCFD recommendations, which may make the transition between the two smoother.
Taskforce on Nature-related Financial Disclosures (TNFD)
At the end of last year, the Taskforce on Nature-related Financial Disclosures (TNFD) at COP16 in Cali, announced that over 500 organizations have committed to align their risk management and corporate reporting with TNFD recommendations. This marks a 57% increase since the beginning of 2024. Was an organization you know, or perhaps work for amongst those 500?
Outlook 2025 and in practice
The latest directive from the TNFD was published on 27 October 2024. This discussion paper contains draft guidance on nature transition planning, intended for companies and financial institutions developing and disclosing a transition plan in line with the TNFD recommendations. Stakeholders can provide feedback on these draft directions until 1 February 2025. Final guidance is expected in 2025.
Next to that, the TNFD will conduct pilot programmes in 2025 to help organisations test and implement nature transition plans, with the aim of evaluating and improving the effectiveness and usability of the guidelines.
How does this look like in practice? As the TNFD is relatively new, organizations are still finding their way in how to implement this, whom to involve, and how to gather the nature data and related solutions.
Nonetheless, these developments highlight the growing importance of nature-related financial disclosures and the need for organisations to identify and manage their dependencies, impacts, risks and opportunities related to nature. Proper implementation of the TNFD-disclosures may also help your biodiversity-disclosures of ESRS E4!
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Reach out!
All in all, there is a lot happening in the field of sustainability reporting and strategy. Be on the lookout for how others are doing. And if you need any help, feel free to reach out to Esther de Graaf and/or Marco Kwakernaat.
