Europe’s Sustainability Reporting Rules are working
As part of the EUKI project Company Climate Transition, Frank Bold has published the findings of 100 European companies’ first-year reporting under the Corporate Sustainability Reporting Directive (CSRD). The research shows that Europe’s sustainability framework is already driving progress and closing long-standing gaps in corporate transparency. The study shows how companies are setting ambitious climate targets and reporting clearer and more structured climate transition plans.
This progress, however, comes at a crucial political moment.
New Omnibus Simplification proposals currently debated in the European Parliament would significantly weaken the CSRD’s scope and ambition, raising thresholds to companies with over 1,000 employees and €450 million turnover.
Such a change would exempt nearly 90 percent of European companies, undermining both the transformative potential of the EU’s sustainability agenda and the data quality investors, regulators, and businesses themselves depend on.
It would also weaken Europe’s long-term competitiveness and its ability to respond to energy, climate, and technological risks.
Frank Bold’s analysis covered 100 companies from Western Europe and Central and Eastern Europe (CEE), assessing disclosure quality in four areas:
a) climate transition plans, b) GHG emissions, c) double materiality and due diligence, and d) governance.
Across these dimensions, evidence shows that the EU’s legal framework is working, improving comparability, accountability, and climate-risk preparedness among Europe’s largest firms.
Climate risk preparedness
- Companies across the board showed notable improvements on their climate transition planning, with 54% presenting a plan and 73% committing to decarbonisation targets.
- Strinkingly, 40% committed to net-zero targets. Thereby, clearly distinguishing themselves from general carbon neutrality commitments.
- Yet, many plans still lack detail on implementation timelines, interim targets, and financial assumptions—limiting their credibility and comparability.
GHG Accounting
- Reporting of Scopes 1, 2 and 3 emissions is now near-universal, a major leap in transparency.
- Comparability of Scope 3 data has improved, though a minority of companies still provide incomplete or inconsistent information, particularly on supply-chain emissions.
- Carbon removals and offsets remain a blind spot, with few firms disclosing clear strategies or verification details.
Double Materiality and Due Diligence
- Progress is striking: between 2024 and 2025, the share of companies reporting their material impacts and risks and opportunities rose from 15% to 94 percent, and 53% to 94 percent, respectively.
- While most companies (85%) claim to consider their entire value chain, few detailed high risk areas or explain how they are monitored.
- Similarly, while nearly three-quarters claim to have a due diligence process in place, only 34% link it to due diligence and double materiality, and only 12% explain how that link works in practice.
Managing Sustainability
The EU CSRD became the bridge for sustainability, financial, operational and legal teams to discuss with their leadership the sustainability risks and impacts that are relevant for the strategic development of their business.
Governance disclosures reveal the maturity of oversight and how sustainability is prioritised at senior levels. While our study shows that sustainability has entered the boardroom, transparency on important actions and decision-making is still missing.
Regional Differences
- Western European firms generally demonstrate stronger climate transition planning and more complete data, while CEE companies lag behind in identifying and reporting climate risks. This gap exposes CEE firms to greater vulnerability to climate-related shocks and regulatory uncertainty.
- Only a few CEE companies extend their double materiality assessments beyond direct operations to full value chains. This limits their ability to anticipate material risks, impacts and opportunities, reducing supply chain resilience.
- Nonetheless, the gap is narrowing.
The introduction of the European Sustainability Reporting Standards (ESRS) has begun to level the playing field, particularly in the disclosure of GHG metrics and the financial effects of climate risks.
Policy Context: A Framework Under Pressure
Our findings show that Europe’s sustainability reporting rules are effective, but they are being reconsidered just as results become visible.
The Omnibus I Simplification Package proposes raising thresholds drastically for both the reporting and due diligence legislation. If adopted, these changes would exclude most companies from reporting requirements and the mandatory development of climate transition plans. As warned by the European Central Bank, this will create severe information gaps and undermine business-to-business relations. Additional consequences include the limitation of opportunities for mid-cap companies (in relation to financing or competition with larger companies) and increase financial institutions’ reliance on costly external service providers.
While intended to reduce administrative burden, such measures risk rolling back Europe’s global leadership on sustainability and weakening corporate resilience to systemic risks. By scaling back, Europe would not only sacrifice data quality but also the tools companies need to navigate the transition to a sustainable economy.
Looking Ahead
Frank Bold’s report confirms that mandatory reporting under EU standards works; it fosters transparency, comparability, and strengthens the competitiveness of EU companies globally.
As mentioned by EU Commission’s Executive Vice-President Teresa Ribera, Europe’s industry is ready to lead in delivering green, resilient, and high-standard solutions amid a growing $2 trillion global clean tech market.
High-quality, comparable sustainability data is essential to scale up clean technologies and advance the EU’s strategic goals in energy efficiency and resource autonomy. The CSRD provides the information infrastructure necessary to strengthen Europe’s industrial competitiveness and resilience in the global race for green technologies, and withstand pressure from oil-producing countries to maintain dependence on fossil fuel imports.
The research, published in October 2025, will be complemented by an open-access database launching in late November 2025, offering detailed company-level data for further analysis.