Is CSRD Reporting Getting in the Way of Real Sustainability?

CSRD reporting aims to make sustainability disclosures more standardized and comparable. It can also help organizations develop their sustainability strategy and identify their material topics. But better reporting does not automatically mean better sustainability performance. Reporting demands significant time and effort, and can draw resources away from the very improvements it is meant to support. The CSRD Omnibus changes may ease that burden, but an important question remains: how can organizations ensure reporting drives sustainability action rather than competes with it?

The gap between CSRD reporting and real sustainability

In my research into CSRD implementation in the Dutch energy sector, a sustainability reporting manager at a large European energy company warned that CSRD could eventually become a “box-ticking exercise.” You rarely find such claims on a company’s website, in press releases, or in sustainability reports, yet it emerged repeatedly in my conversations with those doing the work.

The energy sector is a compelling place to explore this gap. Companies in this sector face two simultaneous pressures: meeting sustainability reporting requirements and transforming the entire sector to meet climate targets. If reporting and performance drift apart, the consequences matter.

Three major CSRD reporting roadblocks

1. Reporting competes with sustainability implementation

Larger, more established companies have often built and automated entire reporting systems just to keep up with disclosure requirements. Several sustainability managers stated the effort required for reporting pulled attention away from practical sustainability work, such as reducing greenhouse gas emissions.

One sustainability manager described reporting as “a pure reporting exercise”, explaining it drew resources and management focus away from innovation. The concern was that producing the report had become a goal in itself.

2. Disclosure metrics don’t guide decisions

CSRD requires companies to disclose extensive environmental, social, and governance information. But knowing what to report does not automatically tell an organization how to improve the underlying outcome.

One reporting specialist brought up biodiversity as an example. She explained that her organization needed to develop its own metrics because the reporting metrics did not adequately serve its operational needs.

Companies also need to understand what a good outcome looks like in their own context. That can mean researching benchmarks and developing measures that help people make decisions, alongside meeting disclosure requirements.

3. Reporting and strategy run on parallel tracks

In several companies, sustainability strategy had been in place for years before CSRD existed. The disclosure process was simply layered on top, rather than shaping it.

“I don't believe the strategy was developed with the reporting in mind.”

— Sustainability manager

For some organizations with a long history of sustainability work, CSRD was seen as an additional compliance exercise. Reporting and strategy existed alongside each other, with little connection between the two.

Why compliance takes priority

When managers explained why compliance received so much attention, a recurring theme was fear: the risk of penalties, litigation, or reputational damage. Almost every sustainability manager interviewed described these pressures as driving reporting.

That is a difficult starting point for lasting change if the main objective becomes avoiding mistakes in the report.

Sustainability appeared more embedded in companies where people cared about improving performance and wanted to make a difference within the organization. In those companies, reporting also seemed more likely to feed back into strategy.

The distinction matters. Meeting a reporting requirement can create discipline, but connecting that process to meaningful action requires business commitment.

How the CSRD Omnibus Updates Impact Strategy

The Council of the EU gave final approval to the Omnibus I package changes to sustainability reporting and due diligence requirements on 24 February 2026. For EU companies, the revised CSRD scope centers on businesses with more than 1,000 employees and net annual turnover above €450 million, substantially narrowing the reporting population. The changes also require transposition into national law.

A lighter reporting burden could leave more room to focus on practical sustainability performance. But changing the scope does not, by itself, solve the disconnect between reporting and strategy.

Several managers said the back-and-forth over requirements had confused companies and made them more cautious about investing in preparation. Some were waiting to see whether requirements would be simplified further before committing resources.

That uncertainty can delay useful work as well as compliance preparation. Companies still need to understand their material sustainability issues and decide how to address them, whatever their reporting obligations become.

Five ways to reconnect reporting and performance

Reporting is more likely to make a difference when companies connect it to responsibilities, resources, and decisions. My research points to five recommendations:

1. Give each material topic a named owner. Make responsibility and accountability clear.

2. Tie disclosure metrics to targets, budgets, and investment decisions. Use the clear numbers and targets to guide what the company does next.

3. Review sustainability data in strategy and operational meetings. Bring it into the discussions where decisions are made.

4. Protect resources for implementation. Ensure reporting does not quietly absorb the time and budget needed for practical sustainability work.

5. Identify actions that changed because of reporting. Be able to explain how the process influenced a decision or improvement.

The companies that avoided the reporting trap were not necessarily those that disclosed the best. They were the ones that could say which topics actually mattered, focus their effort there, and keep asking what the numbers meant for the business.

CSRD can make disclosure more rigorous and useful. Whether it makes companies more sustainable still depends on what happens after the report is filed.

This article is based on findings from my master’s thesis research into CSRD implementation in the Dutch energy sector.