Turn mandatory CSRD reporting into a competitive advantage
By María Luisa Ramírez; Audit Partner, Bové Montero (HLB Spain)
2028 is the deadline for one of the biggest business reporting upheavals in European Union (EU) history. More than 50,000 companies across the EU will be required to publish detailed sustainability reports under the Corporate Sustainability Reporting Directive (CSRD).
If your business is on the list, it might be tempting to delay the inevitable paperwork, data collection, and costs as long as possible. But what that mindset does is prevent you from seeing the unprecedented opportunity that CSRD presents: to differentiate your business from the competition, position it as a forward-thinker, and identify areas of improvement that were not obvious earlier.
CSRD is more than just a compliance compulsion. In this article, we'll explain why.
Beyond compliance: What the CSRD actually asks of a business
CSRD was introduced primarily to address shortcomings in previous legislation. Data quality, evolving market trends, and public demand for more responsible business practices in financial and non-financial reporting standards were not previously considered.
The new directive focuses on ensuring disclosed information is relevant to the objectives listed in the Green Deal and Action Plan on Financing Sustainable Growth. It includes key factors like:
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Emphasising non-financial reporting: Non-financial reporting was not mandatory earlier, making it difficult to compare and verify sustainability claims. CSRD amended that by requiring businesses to disclose material information related to sustainable activities and their financial impact on all major sustainability topics like emissions, biodiversity, etc.
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Reducing administrative burden: Environmental, social, and governance (ESG) reporting can be cumbersome for smaller businesses with limited resources. Complying with requirements only gets harder when you consider local jurisdiction. To simplify operations, CSRD exempts certain small and mid-market businesses from mandatory ESG reporting. Only listed small and medium-sized enterprises are required to comply with CSRD requirements.
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Introducing independent checks for reliability: Previously, there were no protocols to confirm the credibility of disclosed sustainability and financial information. The new directive introduces independent assurance checks to ensure the information is reliable.
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Creating the European Single Access Point (ESAP): ESAP acts as a single source of truth for publicly available information related to financial services, capital markets, and sustainability. CSRD ensures that ESG reports are also available in formats recognised by the ESAP, guaranteeing that even the smallest businesses are visible to investors.
This can seem like a lot of work, and, as a mid-market business, you might be enticed to take the extension. But you may miss out on a few business opportunities and exposure if you decide to delay ESG reporting.
First-mover advantages in ESG reporting
Complying with CSRD can help fuel sustainable growth, differentiating you from your competition. It can even impact how potential partners, investors, and customers view your business. Here are a few other benefits to consider:
Create a competitive edge through transparency
The sheer complexity and workload introduced by CSRD requirements can seem overwhelming. But being more transparent about your ESG endeavours can be a strategic advantage in a number of small but significant ways.
Identify gaps in your supply chain
CSRD requires that ESG reports cover sustainability efforts across the whole value chain, including operations, production, services, and supply chain. It highlights adverse effects in your value chain and your efforts to monitor and mitigate those impacts. Besides making existing operations more sustainable, businesses can use this information to improve operational efficiency. They can also identify the right partners that complement or improve the existing value chain.
Attract the right talent
Gen Z consumers are not the only group of people looking at your CSR initiatives. Even employees care about a company’s stance on issues close to them, including social and sustainable practices.
According to Deloitte's “2025 Gen Z and Millennial Survey,” employees are also considering a company’s environmental policies and impact before working with them. ESG reports offer an honest outlook of CSR performance and impact, ensuring future employees feel confident about your policies.
Stay ahead of evolving regulatory demands
Buying into ESG reporting practices early can help businesses stay ahead of regulatory demands and avoid any penalties in the process. In fact, MSCI found that businesses with higher ESG ratings historically outperform lower-rated peers. Taking a more proactive approach allows businesses to adapt quickly to any new regulations, leverage sustainability trends, and grow faster than their competition.
Make CSRD work for your business with HLB
CSRD reporting shouldn't be another tick box in your organisations to-do list. With the right guidance, you can convert mandatory compliance paperwork into a competitive advantage that makes you attractive to investors, partners, and potential customers.
At HLB, our ESG advisory team goes beyond simple compliance management. We focus on embedding sustainable values into your core business model. First, we benchmark your current ESG strategies. Then, we design relevant measures to convert your CSRD efforts into a roadmap for a more sustainable, ethical future.
Want to transform your ESG reports into a competitive advantage? Get in touch with us to discover how we can support your sustainability journey.
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