Sustainability Reporting
Your path to robust ESG transparency, regulatory certainty, and strategic management
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SUSTAINABILITY
REPORT
Sustainability is no longer just a communications or reporting topic. It affects financing, customer relationships, resilience, risk management, and the future viability of the business model. Modern sustainability reporting therefore creates more than transparency: it connects material impacts, risks, and opportunities with governance, data quality, and corporate steering.
After stop-the-clock, Omnibus I, and the upcoming ESRS changes, one thing is especially decisive: choosing the right reporting framework for your company size, regulatory status, and the expectations of banks, customers, investors, and business partners. That is exactly where we support you – from scope checks and materiality to data processes, reporting, and audit readiness.
Current legal framework
Omnibus IFinal at EU level, published on 26.02.2026 and in force since 18.03.2026. |
New CSRD thresholdsFuture focus on companies with > 1,000 employees and > EUR 450 million net annual turnover. |
New ESRS data pointsPlanned before summer 2026; legally no later than 18.09.2026. |
VSMERecommended by the Commission since 30.07.2025; the future voluntary standard for companies up to 1,000 employees is expected to build on it. |
The landscape of sustainability reporting in Europe has been significantly reorganized since 2025. With the stop-the-clock directive, the former second and third CSRD application waves were postponed. With Omnibus I, the CSRD scope was refocused on the largest companies. For many businesses, the immediate legal reporting obligation falls away – but not the need for reliable ESG data. Banks, large customers, investors, and value chains continue to request sustainability information in a structured way.
For practice, this means: not every company will need a full CSRD/ESRS report in the future. But almost every larger or finance-relevant company needs a robust ESG data and management system.
Overview of suitable reporting frameworks
EU legal status
With the stop-the-clock directive, the first application dates for the former second and third waves were postponed by two years. With Omnibus I, the CSRD scope was reshaped to focus on the largest companies. For companies that remain within scope under the new setup, reporting remains aligned with the ESRS.
At the same time, the revised ESRS are not yet in force. Until the new delegated act is adopted, the existing first ESRS set therefore remains applicable. For companies in the former first wave, Quick Fix reliefs also apply so that no additional disclosures for the 2025 and 2026 financial years are forced beyond the first reporting year.
Implementation into national law
GERMANY
- Status of CSRD implementation: National drafts and parliamentary deliberations exist; the final, fully completed German implementation situation still needs separate review.
- Website wording: “In Germany, national CSRD implementation is still in motion. What matters therefore is the current EU status plus the currently applicable German implementation.”
AUSTRIA
- Status of CSRD implementation: The Nachhaltigkeitsberichtsgesetz (NaBeG), BGBl. I No. 6/2026, was promulgated on 18.02.2026 and has applied since 19.02.2026. Omnibus adjustments also require national follow-up.
- Website wording:“Austria already has a national CSRD implementation act in place; further Omnibus I adjustments will follow through national transposition.”
ITALY
- Status of CSRD implementation: The CSRD was already implemented via Decreto Legislativo 6 settembre 2024, n. 125; entry into force was on 25.09.2024. Here too, Omnibus adjustments must be transposed separately.
- Website wording: “In Italy, the original CSRD has already been implemented nationally; Omnibus I requires additional national adjustments.”
THE COMPANIES
WHO HAVE CHOSEN US
Who is currently subject to reporting requirements (this could change shortly due to the EU Commission’s omnibus proposal) ?
Under the current EU legal status, mandatory CSRD reporting will in future apply to EU companies and EU parent companies of large groups if they employ more than 1,000 people on average during the year and have net annual turnover above EUR 450 million.
For certain third-country configurations, sustainability reporting will apply only if the parent company in the EU generates more than EUR 450 million in turnover and there is also an EU subsidiary or branch with more than EUR 200 million in turnover.
For companies that fall out of the mandatory scope, voluntary, standardized reporting becomes strategically more important: not as compliance, but as a response to bank, customer, and supply-chain requirements.
Why voluntary ESG data still matters
Even outside the formal CSRD scope, ESG data remains relevant for credit and business. Banks must systematically integrate ESG risks into strategy, risk management, and lending processes since 11.01.2026 – and small and non-complex institutions no later than 11.01.2027. Those who can provide reliable data reduce follow-up questions, improve compatibility, and increase the quality of financing discussions.
The CSRD requires companies to provide comprehensive information on the following ESG topics:
- Business model and strategy with regard to sustainability
- Governance and corporate management in the ESG context
- Environmental and social impacts, including climate risks
- Supply chain and value chain transparency
- Measurable ESG indicators in accordance with EU taxonomy
Companies that take early action not only ensure compliance, but also gain a decisive competitive advantage.
Would you like more detailed information about the process? Download our roadmap to the CSRD process here.
The roadmap is currently only available in German. Please contact us if you would like the roadmap in English.
The VSME sustainability standard
The VSME (Voluntary Sustainability Reporting Standard for SMEs) is currently the most important voluntary ESG reference framework for small and medium-sized enterprises. It was recommended by the European Commission on 30.07.2025 and is particularly suitable for companies outside the legal CSRD obligation that still need to provide structured ESG information to banks, customers, or value chains.
The VSME is modular: the Basic Module provides the compact minimum standard; the Comprehensive Module adds additional disclosures often requested by banks, investors, and larger business partners. This allows reporting to be developed step by step and resource-efficiently.
Important for the website: the future EU-level voluntary standard planned for companies up to 1,000 employees has not yet been adopted. It is expected to build on the VSME. For practical purposes, the VSME is therefore already the most sensible foundation.
Let us create your VSME report – request your individual quote now!
Would you like more detailed information about the process? Download our roadmap for the VSME process here:
The roadmap is currently only available in German. Please contact us if you would like the roadmap in English.
How do customers benefit from our experience?
A good sustainability report creates internal orientation and external credibility. It helps companies manage ESG risks and opportunities systematically, respond faster to bank and customer requirements, close data gaps along the value chain, and translate regulatory changes into reliable processes.
Especially in the current transition phase, the added value is not “more reporting” but “more clarity”: Which requirements really apply? Which data points make sense? Which processes should be built today, even though the legal framework is changing? Here, we create structure instead of actionism.
WHY CHOOSE TERRA?
We combine regulatory understanding with practical implementation work. That means we interpret CSRD, ESRS, VSME, and taxonomy not abstractly, but translate them into concrete work packages, responsibilities, data requirements, and reporting solutions.
Our approach is industry- and size-appropriate: a company in the future CSRD scope needs different processes than a midcap outside the mandatory scope or an SME that mainly needs to respond to bank and customer demands. That is why we do not develop off-the-shelf reports, but tailored reporting and steering solutions.
- Regulatory-compliant classification of CSRD, ESRS, VSME, and EU Taxonomy
- Practical translation into processes, responsibilities, data structure, and reporting
- Support with scope check, double materiality, gap analysis, data collection, drafting, and audit readiness
- Voluntary reporting solutions for companies outside the CSRD scope
WHAT IS OUR APPROACH?
1. Scope check & scoping: Review of the current legal status, classification into CSRD scope / voluntary framework, definition of objectives, reporting boundaries, and stakeholders
2. Materiality & data map: Double materiality or pragmatic topic prioritization, mapping of relevant ESG data, identification of gaps and responsibilities
3. Data processes & governance: Setup or refinement of data collection, roles, approvals, internal controls, and documentation
4. Report preparation: Drafting, KPI processing, structuring according to CSRD/ESRS, VSME, or the voluntary target model
5. Review & publication readiness: Quality assurance, stakeholder readiness, proximity to assurance, and clean handover for management report, website, or voluntary ESG report
THE MOST FREQUENTLY ASKED QUESTIONS ON THE TOPIC OF SUSTAINABILITY REPORTS – FAQS
1. Is a sustainability report still mandatory?
Yes – but in future only for a much smaller group of companies. After Omnibus I, the CSRD focuses on the largest companies. For many other companies, reporting is no longer legally mandatory, but it remains business-relevant.
2. Who is affected by the CSRD under the new EU status?
EU companies and EU parent companies of large groups remain in scope if they employ more than 1,000 people on average and have net annual turnover above EUR 450 million. For certain third-country configurations, separate EU turnover and presence thresholds apply.
3. What does "stop-the-clock" mean in practice?
The stop-the-clock directive delays first-time application for the former second and third waves by two years. Companies that would originally have had to report for the 2025 or 2026 financial years gain more time.
4. When will the new ESRS data points arrive?
The European Commission is planning the revised ESRS delegated act before summer 2026. Legally, adoption is guaranteed no later than six months after the Omnibus I amending directive enters into force – i.e. by 18.09.2026 at the latest.
5. What applies until then?
Until the new delegated act, the existing first ESRS set remains applicable. For companies in the former first wave, the Quick Fix reliefs also apply.
6. What is the VSME - and who is it good for?
The VSME is the recommended voluntary ESG standard for small and medium-sized enterprises. It is especially worthwhile for companies outside the CSRD scope that want to provide structured ESG data to banks, customers, or value chains.
7. Does the new EU legal status automatically apply nationally?
No. For directives, national transposition must always also be considered. That is why the website should consistently present EU legal status and national implementation separately.
8. What about the EU Taxonomy?
For companies in the CSRD scope, the EU Taxonomy remains relevant. The simplifying taxonomy rules were published in the Official Journal in early 2026 and generally apply from 01.01.2026 for financial year 2025; alternatively, companies may apply the simplifications only from financial year 2026.
Contacts
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office@terra-institute.eu
Tel. +39 0472 970 484.
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