The vast majority of companies that have been removed from the scope of the EU’s Corporate Sustainability Reporting Directive (CSRD) as a result of the recent Omnibus initiative plan to maintain or even expand their sustainability reporting activities despite the lack of regulatory requirements, with companies citing a range of benefits from their reporting activities beyond compliance, and most already saying sustainability data is already integrated into their corporate reporting infrastructure, according to a new survey released by sustainability software provider osapiens.
For the report, “Beyond Compliance: Sustainability Reporting After the Omnibus,” osapiens surveyed more than 400 executives, including Heads of Sustainability, Heads of Compliance, CFOs, CIOs, Heads of Supply Chain, and Heads of Human Rights at companies with more than 1,000 employees across Europe and the UK. The was conducted in cooperation with Andreas Rasche, Professor of Business in Society at Copenhagen Business School.
The release of the study follows the recent completion of the European Commission’s Omnibus I simplification initiative, which saw the adoption of the new rules to dramatically cut back the number of companies covered by key pieces of sustainability legislation, including the CSRD and Corporate Sustainability Due Diligence Directive (CSDDD). While initially including companies with more than 250 employees, the Omnibus process set a new threshold for CSRD to exclude companies with fewer than 1,000 employees and less than €450 million in annual revenues, removing an estimated 90% of companies from the regulation’s sustainability reporting requirements.
The new survey, however, found that most companies plan to continue with their sustainability reporting activities despite the lack of regulatory compliance obligations. Of the companies surveyed that were taken out of the CSRD scope through the Omnibus process, 90% said that they intend to maintain or expand their sustainability reporting activity. Additionally, 86% of those companies said that they can continue producing reports aligned with CSRD-level standards.
The study found that the intention to continue reporting comes as sustainability reporting has moved beyond compliance, with companies already integrating sustainability data into the broader corporate reporting infrastructure, and embedding the data into their assessments of business risk and decision making processes.
Survey respondents reported, for example, that they are already using sustainability data in areas including operational and resource planning, cited by 53% of respondents, innovation and process design (48%), financial planning and investment decisions (38%), and supply chain risk assessment (38%).
Similarly, respondents reported benefits from sustainability reporting data including improved visibility into climate, supply chain, and operational risks (49%), stronger investor confidence and the ability to respond to ESG data queries (44%), meeting customer or partner reporting and audit requirements (44%) and better integration between financial and sustainability decision-making (43%).
Moreover, the vast majority (90%) of executive surveyed said that sustainability reporting is already partially or fully integrated with financial reporting at their companies, with sustainability metrics already feeding into financial reporting cycles, and most expecting that collaboration to expand over the next 12 months.
Rasche said:
“The results indicate a clear preference for reporting continuity among larger firms that were exempted under the Omnibus I package. This development brings voluntary reporting and beyond-compliance strategies firmly to the forefront of the future sustainability agenda.”
While companies report already integrating sustainability data into corporate reporting and seeing benefits from sustainability reporting, however, the survey found that most also (84%) anticipate that reduced regulatory scrutiny will eventually lead to fewer internal resources being allocated to sustainability reporting.
In the near-term, however, the survey found that 90% of respondents expect their companies’ investments in sustainability reporting solutions and automation to increase over the next 12 months.
Examining the key challenges to sustainability reporting, the study found that the top barriers cited by executives included budget constraints around the cost of data collection and analysis (43%), fragmented data across tools and reporting systems (40%), poor technology or system integration (31%), and unclear ownership or accountability for sustainability reporting (29%).
Alberto Zamora, Co-Founder and Co-CEO of osapiens, said:
“For the past years, the regulatory trajectory was largely one-directional: more requirements, more companies in scope. The Omnibus package has changed this direction. However, our data shows that when the obligation is removed, companies don’t step back. They have realized that reporting is no longer merely a compliance exercise, but a part of how they understand risk, allocate capital and grow sustainable.”
Click here to access the survey.
