CSRD & ESRS 101: Essential steps for reporting success in 2025

For companies subject to the CSRD—those meeting two or more of the following criteria: 250+ employees, €40M+ turnover, or €20M+ in assets—the pressure is on to gather, consolidate, and disclose sustainability data across the entire organization.

This may sound intimidating, but it really doesn’t have to be. With the right approach to reporting, it can be not only straightforward, but a fantastic exercise in value creation for your business, not only bringing opportunities for resilience into focus, but new potential revenue streams, as well.

The 2025 reporting landscape: What’s new?

By 2025, companies must prepare for:

• Expanded scope: CSRD extends to non-EU parent companies with significant EU operations and to subsidiaries under group-level disclosures.
• Assurance requirements: Third-party assurance of sustainability disclosures becomes mandatory, placing a premium on data accuracy and traceability.
• Sector-specific standards: Enhanced ESRS reporting guidance for industries like energy, agriculture, and textiles is expected, requiring tailored reporting strategies.
• Double materiality assessments: Companies must demonstrate both the societal impact of their operations and how sustainability issues affect financial performance.

These requirements place increased scrutiny on the processes used to collect, organize, and verify sustainability data. This is why ESRS was introduced in the first place, as a way for businesses to organize their different disclosures across different criteria.

This may seem broad for now, but the basis for all of this is the double materiality assessment, or DMA.

Step 1: Start with double materiality assessments

Double materiality is at the core of ESRS reporting. Organizations must identify key impacts, risks, and opportunities from two perspectives:

1. Impact materiality: How business activities affect people and the planet.
2. Financial materiality: How sustainability factors influence business performance.

A comprehensive assessment ensures your company focuses on material topics that align with both regulatory expectations and stakeholder priorities. The double materiality assessment can be complex or time-consuming for first timers and is subject to limited assurance, meaning the auditors place a lower level of good faith in your disclosures.

This is why it is important to have enough time to understand and then conduct a double materiality assessment before the first reporting cycle to get used to the rigors of it as a practice. The silver lining though is that a DMA is the foundation of your ESRS reporting, and puts you in a good position to take the next step.

Step 2: Build robust data systems

With assurance requirements in place, ad hoc spreadsheets and manual processes won’t suffice in 2025. For most, the data sets are simply too large to build out in Excel, which is not only error-prone, but incredibly laborious. A robust ESG software on the other hand will:

• Automate data collection: Reduce errors and streamline workflows with integrated APIs and real-time tracking.
• Centralize data storage: Create a single source of truth for all sustainability metrics.
• Enable audit readiness: Facilitate traceability and compliance with audit trails built into the system.

These systems should also allow for disaggregation to accommodate the unique needs of subsidiaries, joint ventures, and other entities.

Step 3: Engage across the value chain

The CSRD requires data beyond your company’s walls. You’ll need input from suppliers, partners, and stakeholders to comply with disclosure requirements, especially for Scope 3 emissions. This makes collaboration a key element of 2025 success.

Key actions include:

• Understanding which type of value chain data will be required by your company to comply with ESRS.
• Establishing clear expectations with suppliers and contractors.
• Hosting workshops to align internal teams and external partners.
• Implementing data-sharing agreements to ensure transparency.
• Integrate new requirements into supplier code of conduct and/or agreements.

Step 4: Choose the right reporting approach

Depending on your organization’s structure, you’ll need to decide between a top-down or bottom-up reporting strategy:

• Top-down: Assess impacts and materiality at the group level, standardizing across subsidiaries.
• Bottom-up: Allow subsidiaries to conduct individual assessments, consolidating results at the group level.

The best approach will depend on factors such as governance maturity, the complexity of your portfolio, and where knowledge resides within the organization.

Step 5: Prioritize training and accountability

Compliance in 2025 isn’t just a systems challenge—it’s a people challenge. Equip your teams with the tools and knowledge they need to succeed:

• Provide regular training on ESRS requirements and the use of reporting platforms.
• Assign clear roles and responsibilities across departments to avoid duplication or gaps.
• Develop internal expertise to reduce reliance on external consultants over time.

Tip: One of Position Green’s customers recently conducted their own DMA process, and used internal training as a core basis to enhance their teams’ capabilities. Read how Ependion completed their DMA with a self-driven approach.

Overcoming common challenges

1. Managing disaggregated data
Large groups with diverse operations often struggle to consolidate data meaningfully. Using consistent impact thresholds across subsidiaries can simplify this process while ensuring group-level alignment. A software system to manage data can be invaluable here, as it standardizes the data you and your peers collect, as well as how you collect it.

2. Addressing assurance requirements
Mandatory assurance requires companies to maintain audit-ready data systems. Regular internal audits can help identify gaps before external audits are conducted.

3. Navigating sector-specific guidance
Stay informed about updates to ESRS for your sector, and adjust your reporting strategy accordingly.

Why 2025 matters for CSRD and ESRS

The year 2025 marks an expansion in the number of businesses subject to ESRS, but also sets apart the businesses who marry compliance and opportunity by aligning regulatory requirements with strategic value creation. Companies that get it right won’t just satisfy regulators; they’ll build resilience, attract investors, and strengthen stakeholder trust.

Our top recommendation is to ensure you have the right solution in place to help you succeed, but that can be a challenge unto itself.

Luckily, we’re here to help you gain the clarity you need, with a dedicated guide to help you understand all the software options available, their pros and cons, and which is best suited for you.

Check out our ESRS software buyer’s guide for CFOs today to get the ball rolling on your 2025 reporting, with the right tools in place.