CSRD Compliance: What Global Companies Must Do

Why ESG Reporting Is No Longer Optional in the EU – and What It Means for the World

Walk into any multinational boardroom in 2025, and you'll likely hear three letters stirring both anxiety and urgency: CSRD.

The Corporate Sustainability Reporting Directive, passed by the European Union, is not just another regulation. It’s a tectonic shift in how companies measure, manage, and report their environmental, social, and governance (ESG) impact — and its reach goes far beyond Europe.

The big question for global companies: Are you ready, or dangerously behind?

What Is CSRD, and Why Should You Care?

The CSRD replaces the Non-Financial Reporting Directive (NFRD) and expands its scope exponentially:

• From 11,600 companies under NFRD to over 50,000 under CSRD.

• It requires audited, standardized ESG disclosures, not just voluntary climate blurbs buried in annual reports.

• Applies to non-EU companies generating €150 million+ in EU revenue, with at least one subsidiary or branch in the EU.

• Begins phasing in January 2025, with large listed companies first in line.

This isn't a soft nudge. It’s a legal requirement backed by penalties — and reputational consequences — for non-compliance.

Why It Matters: Transparency Becomes a Business Imperative

The CSRD demands companies report in line with the European Sustainability Reporting Standards (ESRS). These standards go well beyond carbon emissions, diving deep into:

• Biodiversity impacts

• Supply chain due diligence

• Worker rights and human capital

• Anti-corruption practices

• Circular economy performance

In short: it’s no longer about saying you’re sustainable — it’s about proving it.

A PwC 2025 survey found that 68% of investors will reconsider investing in companies that fail CSRD standards. Reputation and capital are on the line.

The Data Doesn’t Lie

• 41% of global companies required to report under CSRD in 2025 said they were “not prepared.”

• 60% of ESG reports in 2024 lacked verifiable data — a direct risk under CSRD’s audit requirements.

• Only 23% of affected firms currently map their ESG performance to materiality standards required by ESRS.

This is not just a compliance challenge. It’s a capability crisis.

Case Studies: Who’s Leading the CSRD Compliance Charge?

1. Unilever

With operations in nearly every EU country, Unilever has already aligned its sustainability reporting with double materiality — a core CSRD principle that considers how the company impacts the world, and vice versa. Their 2024 report includes third-party assurance, a future CSRD must-have.

2. SAP

Germany’s software giant is not just complying — it’s innovating. SAP launched Green Ledger, a carbon accounting system integrated into ERP workflows, aiming to provide real-time emissions tracking at product and process levels.

3. Nike (US-Based, EU Sales)

Despite being headquartered in the U.S., Nike will be subject to CSRD by 2028. The company has pre-emptively adopted science-based targets, ESG-linked remuneration, and EU taxonomy alignment — setting the tone for other multinationals outside the EU.

The Big Pain Point: Data Systems Are Not Ready

One of the greatest hurdles isn’t policy — it’s technology. Most organizations lack:

• Granular, traceable ESG data across subsidiaries

• ESG audit trails

• Interoperability between financial and sustainability systems

Without robust data architecture, CSRD compliance becomes a manual nightmare.

That’s why 2025 is the year to invest in ESG tech stacks, train ESG officers, and integrate sustainability into financial reporting systems — not afterthoughts.