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Changes to EU sustainability reporting rules that took effect in 2026 significantly narrowed the scope of companies subject to the Corporate Sustainability Reporting Directive (CSRD). A lower administrative burden is welcome news for some businesses, but it does not reduce the demand for sustainability data or the business risks associated with sustainability.

Requirements and demand for data remain
Mandatory sustainability reporting is now primarily focused on the largest companies: those with more than 1,000 employees and annual net turnover above EUR 450 million. Yet even where a company is no longer required to prepare a comprehensive report, it may still need to provide information to customers and lenders or comply with other EU rules applying to its activities.

One immediate example is the EU Deforestation Regulation (EUDR), which is particularly relevant to the wood industry. From 30 December 2026, large and medium-sized companies will have to ensure that products covered by the regulation and placed on the EU market do not carry a deforestation-related risk and that their origin can be traced.

This demonstrates that other EU requirements do not disappear alongside changes to CSRD. Companies still need to understand where their raw materials come from, how much energy production consumes, where supply disruption risks arise, and which environmental or social factors could affect their operations.

Fewer metrics, greater focus on decision-useful data
The regulatory change is an opportunity for companies to reassess which sustainability data they collect. There is little value in measuring hundreds of indicators solely to compile an annual report. Reliable data that support business decisions matter far more.

For a manufacturing company, these may cover energy and raw material consumption, waste, water, employee safety and critical suppliers. In the wood industry, the origin of raw materials and supply chain traceability are also essential.
Collecting information is not enough; companies must understand its business impact. Energy consumption affects product costs, waste represents lost raw material value, and supply chain disruption can cause downtime and unfulfilled orders. Data on raw material origin may also be essential for entering certain markets or retaining business partners.

Sustainability data should therefore be assessed alongside financial and operational indicators. Lower energy use can mean both reduced emissions and lower costs. Supplier diversification can strengthen the supply chain while also reducing the risk of business interruption.

Sustainability is increasingly linked to competitiveness
EU policy is currently placing greater emphasis on competitiveness, productivity, energy security and resilient supply chains. This does not change sustainability goals, but it does change the context in which they are assessed. Companies increasingly need to understand how energy consumption, raw material availability, regulatory changes and supply chain resilience affect performance.

Sustainability measures should also be evaluated in terms of business value. More efficient resource use can lower costs, reduced dependence on a single supplier can limit operational risk, and preparing for regulatory changes in advance can prevent additional expense and disruption.

The so-called value chain cap introduced through the CSRD changes is also relevant. Companies within the directive’s scope will not be able to request more sustainability information from value chain partners with 1,000 or fewer employees than is set out in the voluntary standard. This should reduce the spillover of regulatory requirements to smaller companies.

At the same time, business partners, banks and customers will continue to require reliable information. Companies no longer subject to CSRD may therefore benefit from maintaining a proportionate sustainability data system rather than abandoning data collection altogether. The European Commission is also strengthening the use of a voluntary standard for companies outside the scope of mandatory sustainability reporting.

A lighter regulatory burden creates an opportunity to make sustainability management simpler and more closely aligned with business needs. Companies do not need to collect every possible data point, but they should retain the information needed to understand costs, supply chains, regulatory risks, business continuity and competitiveness. There may be fewer reports, but that is no reason to know less about the business.