Sustainability reporting, assurance and credible green claims

The simplification of sustainability regulations on competitiveness grounds, as seen in 2025, is a continuing theme in 2026. With the simplifications to the CSRD and CSDDD now agreed under “Omnibus1”, the revised Directives will move into national transposition by Member States.

While the thresholds for mandatory CSRD reporting are reduced by 80% (1000 employees and > €450m turnover) and the requirements are simplified, the circa 300 data points required are comprehensive and subject to limited assurance. 

CSRD Delayed Reporting Deadlines (“Stop the Clock”) - providing companies additional time to prepare for compliance. The revised timeline introduces transition exemptions and deferrals for affected companies:  

• Wave 1 Reporters: Companies that initiated reporting for FY 2024 are expected to maintain their reporting obligations into FY 2025, as most will remain within scope under the revised criteria. The companies that now fall out of scope due to updated thresholds may be exempt from reporting in subsequent years. Member States will have 12 months to implement the CSRD-related changes into their national laws. 
• Wave 2 Reporters: Previously scheduled to commence reporting in 2026 for FY 2025, these companies will see their start date deferred to 2028 for FY 2027. These companies will need to prepare for reporting during 2026 - 2027 to align with revised CSRD requirements.
• Non-EU Entities: The same turnover threshold, i.e. €450 million generated within the EU (for the last two financial years), will apply for non-EU companies where they have at least one subsidiary or branch that also generated net annual turnover over of €200 million within the EU in the preceding financial year. Non-EU group reporting will begin in 2029 for financial year 2028.

Limited versus Reasonable Assurance - CSRD assurance continues to be confined to limited assurance, and the Omnibus framework does not require a transition to reasonable assurance as of yet. 

Voluntary Reporting - For those outside of scope, reporting to the Voluntary “VSME” standard provides an aligned, simpler format ideal for customers, investors or other stakeholders. 

Further streamlining of key environmental laws (including EUDR and in the area of industrial emissions) is anticipated this year, following the publication of the ‘Environmental Omnibus’ by the European Commission at the end of 2025.

Avoiding Greenwash in Green Claims - Credibility of ESG data and its analysis for multiple applications, not just reporting, continues to be a focus. The Empowering Consumers for the Green Transition Directive is to be transposed into Irish law by March 27, 2026, with implementation expected late 2026. This requires ESG data to support credible sustainability credentials of products and services in order to curb greenwashing.  Generic claims (like "eco-friendly") without recognised substantiation will be banned. Third-party accredited sustainability labels will be regulated for claims with data to support traceability across the supply chain.

IFRS: On 11 December 2025, the International Sustainability Standards Board (ISSB) issued Amendments to Greenhouse Gas Emissions Disclosures, which resulted in targeted amendments to IFRS S2 Climate-related Disclosures to address practical challenges faced by companies during implementation of the standard.

While sustainability reporting requirements in the EU are undergoing simplification and adjustment, global regulatory momentum continues to build. The United States has advanced climate disclosure requirements through the California Climate Accountability Package, though the SEC’s final Climate-Related Disclosure Rules face ongoing legal and implementation challenges. The rules remain unenforced and awaiting either formal SEC action or a court decision as of December 2025. Meanwhile, the UK’s new sustainability reporting standards are expected to be issued in February. 

In addition, China has published its first national corporate climate disclosure standard, the Corporate Sustainability Disclosure Standard (CSDS). For global companies, these developments mean you should closely monitor and harmonise your sustainability reporting practices across jurisdictions, ensuring compliance and consistency as standards evolve worldwide.