ESG Reporting Requirements in Europe: An Overview

The landscape of ESG (Environmental, Social, and Governance) reporting in the EU has evolved into a complex and robust framework.

The seeds of ESG reporting were sown in the early 2000s, with various voluntary initiatives and guidelines emerging across member states. However, it was the adoption of the Non-Financial Reporting Directive (NFRD) in 2014 that marked a watershed moment.

Fast-forward to today and the landscape of ESG reporting in the EU has evolved into a complex and robust framework. On January 5, 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force, modernising and strengthening previous rules. The first companies will apply these new rules in the 2024 fiscal year, with reports published in 2025.

These regulations are not mere bureaucratic exercises but catalysts driving a profound transformation in the European business landscape.

The European Green Deal and ESG Reporting

EU law requires companies above a certain size to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment. This helps investors, civil society organisations, consumers and other stakeholders to evaluate the sustainability performance of companies, as part of the European green deal.

Key Regulations and Directives

Non-Financial Reporting Directive (NFRD)

The adoption of the Non-Financial Reporting Directive (NFRD) in 2014 marked a watershed moment.

Taxonomy Regulation

The Taxonomy Regulation, another cornerstone, provides a classification system to define what can be considered an environmentally sustainable economic activity.

Corporate Sustainability Reporting Directive (CSRD)

On January 5, 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force, modernising and strengthening previous rules.

The first companies subject to the Corporate Sustainability Reporting Directive (CSRD) have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.

European Sustainability Reporting Standards (ESRS)

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

Legislative Developments and Timelines

Here's a timeline of key legislative events:

• 26 February 2025: Legislative package - Simplification omnibus. Legislative package to simplify EU rules and boost competitiveness (Omnibus package).
• 9 Octobre 2025: Study - Corporate governance study.
• 4 December 2025: Legislative proposal - Market.
• 9 December 2025: Political agreement - Simplification omnibus.
• 30 July 2025: Recommendation - Voluntary standard for SMEs.
• 31 July 2025: Consultation - ESRS.

Among other things, the package proposes to apply the CSRD only to the largest companies (those with more than 1000 employees), focusing the sustainability reporting obligations on the companies which are more likely to have the biggest impacts on people and the environment.

Examples of EU Companies Embracing ESG

Case studies of EU-based companies reveal a vibrant picture of innovation and commitment. For example, the Danish wind energy giant Ørsted has metamorphosed from an oil and gas behemoth into a global leader in renewable energy.

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