CSRD: What Next If You Are Out of Scope?

Alex McKay

Technical Director

ESG & Reporting

Table of Contents

• Continue progress
• Plan reporting strategy
• Catalyst for action
• How Anthesis can support

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Many businesses in the EU are grappling with what the CSRD Omnibus changes mean for them. Some are trying to work out how to make the most of the two-year extension and are eagerly awaiting the changes to the ESRS standards due in November 2025.

However, many more – approximately 35,000-44,000 (75-94%) – are set to fall out of scope depending on where the thresholds land. This article is for those newly out-of-scope companies that are now facing a critical question: What should we do next?

A new opportunity for voluntary reporting

Until very recently, best practice sustainability reporting has been largely driven by voluntary disclosures. The CSRD and ESRS raised the bar on disclosure and consistency, but arguably not on narrative or communications. In contrast, voluntary reporting offers more flexibility and innovation in sustainability storytelling. But companies are left with an array of frameworks, rankers and raters to consider, not least the ESRS’s own voluntary standard.

As a result, companies that fall out of scope have a huge opportunity to take back control of their reporting strategy, maintaining momentum while reporting more creatively and meeting the needs of their specific stakeholders.

Continue: Don’t lose the progress you’ve made

Even if the regulatory pressure has eased, the investments made to prepare for CSRD reporting shouldn’t go to waste. Many businesses have already strengthened their data management systems, internal controls, and sustainability governance.

While regulatory pressure may be reduced, this strong data management supports high-quality reporting, better decision making through improved insights, and confidence in data that can lead to the increased transparency many stakeholders are looking for. A solid data and reporting framework remains a competitive advantage and can support access to capital, market positioning, and supply chain partnerships.

The double materiality process has also become the new normal. Done well, it can provide deeper insights into materiality, which supports improved decision making and action plans, while integrating sustainability management more deeply into the organisation, ultimately creating business value.

CSRD has also elevated sustainability and sustainability reporting to more senior levels in the business, supporting improved governance as well as increased resource and budget allocation. This means there is a significant opportunity to use this momentum and make the case for improved sustainability activity and reporting, even without the regulatory driver.

Plan: Build a fit-for-purpose reporting strategy

Without a regulatory mandate and amid the flexibility to report to various standards, rankers and raters, or none at all, a systematic reporting strategy is a valuable tool for prioritising disclosures, managing data, and strengthening governance.

A reporting strategy should be led by four key questions:

1. What other regulation is coming your way?
   With over 40 countries in the process of making the International Financial Reporting Standards (IFRS) sustainability standards a requirement for some companies, and other sustainability regulations abounding, there may still be regulatory ESG requirements affecting your reporting. Understand what’s ahead and whether your business may fall into scope down the line.
2. What are stakeholders looking for?
   What information are customers, employees and investors looking for from you? Consider the questions you get in supplier questionnaires, RFPs, investor calls, or employee engagement surveys. Which ratings and benchmarks do your stakeholders value? 
3. How ambitious are you?
   Are you aiming to lead the pack or simply keep pace with your peers? Be realistic about where the business wants to be; otherwise, you will be pushing against a locked door.
4. How much time do you have?
   Let’s be honest, creating an annual report and responding to a number of raters can be a full-time job. Which is fine, if there is a dedicated sustainability reporting role or consultancy budget. But if reporting is part of a role, be realistic about what can be achieved alongside other priorities.

Choose your frameworks wisely

Once you’ve answered the above, you need to consider which reporting frameworks to align to, comply with or complete. Some key options to consider are:

• ESRS VSME Standard: Even if exempt from CSRD, companies may still be asked for sustainability data by larger business partners that remain in scope. The EU has developed a voluntary reporting standard for SMEs, which may serve as a practical template for responding to such requests without being overburdened.
• IFRS Sustainability: While the International Sustainability Standards Board (ISSB) has so far released only two IFRS standards, the growing number of countries considering mandating their use signals their rising importance in corporate reporting strategies. Built on frameworks such as SASB, TCFD, and CDSB, these standards offer a strong foundation for investor-focused sustainability disclosure.
• GRI: GRI is far from obsolete, especially as it complements the IFRS Sustainability Standards by offering an impact perspective alongside IFRS’s financial focus. In fact, some jurisdictions are rumoured to be looking at mandating this pairing. As a comprehensive and long-standing framework, GRI has recommended that the ESRS better align with its established standards under the EU Omnibus. In summary, GRI remains a strong starting point for sustainability reporting.
• CDP: Trusted by both customers and investors, CDP remains the leading platform for comparable sustainability disclosure and benchmarking. With its strong alignment with other frameworks, particularly the ISSB, CDP can help companies maximise the value of their reported data and serve as a stepping stone toward broader reporting readiness.
• EcoVadis: Businesses often rely on EcoVadis to evaluate their supply chain partners, asking selected suppliers to complete an online questionnaire within a defined timeframe. If your customers use EcoVadis as part of their assessments, aligning with this framework can be a strategic way to meet expectations and strengthen commercial relationships.

Act: Make reporting a catalyst for action

Finally, and possibly most importantly, is deciding what level of reporting will support the greatest action. The right level of reporting can create a powerful balance of evidence, accountability, and resources to support efficient reporting and strong, meaningful change. Too much can distract from delivering on the valuable initiatives that will lead to improved sustainability performance. Finding this balance is critical. Depending on your material impacts, you may consider setting climate targets to build long-term resilience, addressing food waste, enhancing circularity, or developing a strategy to combat modern slavery.

In summary, falling out of scope of the CSRD isn’t the end of the road; it’s a chance to redefine your sustainability reporting on your own terms. Continue building on the foundations you’ve laid, plan with intention, and act in ways that support real, lasting change.

At Anthesis, we help companies navigate this turning point, building smart, focused reporting strategies that drive both credibility and action. Get in touch to find out more about how we can help.