The EU’s Corporate Sustainability Reporting Directive (CSRD) is reshaping corporate transparency, requiring organisations to disclose detailed ESG performance. With reports starting in 2025, HR and ESG leaders must act strategically to ensure compliance, and capitalise on the opportunities these regulations offer.
Why HR Matters
CSRD places workforce disclosures at the center of ESG reporting. Key European Sustainability Reporting Standards (ESRS), such as ESRS S1 (“Own Workforce”) and ESRS S2 (“Workers in the Value Chain”), require companies to report on:
- Employee headcount and turnover
- Diversity and inclusion metrics
- Pay equity and gender balance
- Employee engagement, well-being, and working conditions
This elevates HR’s role from administrative support to strategic partner in sustainability reporting. Accuracy, consistency, and timely data collection are critical.
Omnibus Package Updates
Recent changes from the EU Omnibus Package (2025) significantly affect CSRD implementation:
- Narrowed Scope: Only large companies with over 1,000 employees and certain revenue thresholds must comply, reducing the number of affected companies by around 80%.
- Extended Deadlines: Reporting and due diligence obligations under CSRD are delayed by up to two years, giving organisations more preparation time.
- Simplified Reporting: The European Commission is revising ESRS to reduce mandatory data points, clarify requirements, and enhance consistency across EU laws.
These updates aim to reduce regulatory complexity while maintaining transparency and accountability.
Challenges & Strategic Opportunities
HR and ESG leaders face significant hurdles:
- Data Complexity: Aggregating workforce data across countries and systems is resource-intensive.
- Integration Hurdles: Aligning HR systems with ESG reporting frameworks often requires new tools.
- Compliance Pressure: Errors or omissions can have reputational and legal consequences.
At the same time, CSRD and Omnibus adjustments offer opportunities to:
- Lead organisational change through improved reporting practices
- Enhance employer branding and attract talent through transparent sustainability commitments
- Demonstrate HR’s strategic value in driving ESG performance
CSRD compliance is no longer just a regulatory exercise, but a chance to embed sustainability into your organisation’s core. By acting now, HR and ESG leaders can turn regulatory requirements into strategic advantage.
