The European framework for ESG reporting is undergoing a fundamental transformation. The EU Corporate Sustainability Reporting Directive (CSRD), together with the European Sustainability Reporting Standards (ESRS), has become a reality, although the requirements continue to evolve. The result is an environment where the key question is no longer only who falls within the scope of the reporting requirements, but, above all, how companies use ESG information and what value it brings to them.
The reduction in the number of companies subject to mandatory reporting, as well as the simplification of the reporting requirements, was set in motion in February 2025 by the European Commission’s Omnibus package proposal amending the CSRD and the CSDDD (the Corporate Sustainability Due Diligence Directive). A detailed description of the key changes arising from the adopted version of this package is available at the link below the table; a brief overview follows.
| Area | Main changes | Thresholds/details |
| CSRD (Corporate Sustainability Reporting Directive) | Reduction of the scope of mandatory reporting | · > 1,000 employees
· Net turnover > EUR 450 million · Reporting for financial years starting on or after 1 January 2027 |
| CSDDD (Corporate Sustainability Due Diligence Directive) | Reduced scope and later effective date | · > 5,000 employees
· Net turnover > EUR 1.5 billion · Effective for financial years starting on or after 1 January 2030 |
| ESRS (European Sustainability Reporting Standards) | Simplified standards | · Reduction in the number of mandatory disclosures, prioritising quantitative information
· Less administration |
| Smaller suppliers/entities | Reduction of mandatory reporting | · Entities without the obligation to report under the CSRD do not have to provide extensive information across the value chain |
| Assurance | Removal of the reasonable assurance requirement | · Only limited assurance instead of planned reasonable assurance (review-level engagement, not a full audit) |
As a result of the increased thresholds, some companies fall outside the direct scope of the regulatory requirements.
However, this does not mean that ESG loses its relevance. Even entities not subject to the CSRD often face expectations from various stakeholders, including investors, banks, and insurers, as well as customers, business partners, and other entities across the value chain. Employees and other affected stakeholders must not be overlooked either.
Therefore, ESG is shifting from a mere “regulatory obligation” towards a matter of market expectations and a strategic necessity.
The European Sustainability Reporting Standards (ESRS) provide a common ESG “language” across the EU. They cover environmental, social, and governance topics and help companies structure their sustainability information in a clear, comparable manner.
The current evolution of the ESRS reflects companies’ practical experience:
As stated above, sustainability information has become essential for a wide range of stakeholders. Therefore, its quality and credibility are critical.
External assurance significantly enhances the reliability and credibility of sustainability information, both for internal decision‑making and for market and external business partner needs.
Just as an ESG report can be prepared voluntarily with varying scope and content, the extent of assurance can also be tailored. The assurance engagement may, for example, focus solely on specific indicators within the report, such as the carbon footprint or other environmental or social metrics.
Therefore, assurance of sustainability information can be designed flexibly to reflect evolving needs and the rising quality of ESG reporting.
In the Czech Republic, the CSRD has so far been partially transposed through the Accounting Act and the Auditors Act. Sustainability reporting forms part of the annual report and is linked to the digital reporting format and mandatory assurance.
For Czech companies, this means the need for:
Beyond the mandatory requirements, some Czech companies are also gradually shifting their view of ESG, from an external regulatory obligation to a tool that supports better decision‑making and long‑term stability.
The current regulatory developments demonstrate that ESG reporting is not an end in itself. Regulation sets a minimum standard, but real benefits arise when companies naturally integrate ESG principles into their business model and management processes.
Companies that begin addressing ESG early, even beyond their mandatory obligations, gain better insight into risks and opportunities, respond more quickly to market developments, and build trust with key stakeholders. Therefore, ESG becomes a tool for long‑term value creation rather than merely a compliance exercise.
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