ESG reporting in practice
ESG reporting is the structured account of your performance on environmental, social and governance matters. You record figures, policy and risks under a fixed standard. For large companies this is mandatory under the CSRD. For smaller companies it is voluntary, but in practice often unavoidable because customers and banks ask for it.
The short answer
ESG stands for Environmental, Social and Governance. ESG reporting means making these three themes measurable and explaining them in a management report or a separate sustainability report.
The legal core sits in three layers. The CSRD determines who must report. The ESRS determine what you must report and in what form. The auditor then reviews whether the report meets those requirements.
Since the Omnibus I package entered into force in March 2026, the CSRD has been substantially relaxed. It now applies to companies with more than 1,000 employees on average and more than EUR 450 million net turnover. Both thresholds must be met. First reporting covers financial years beginning on or after 1 January 2027. For non-EU companies, financial year 2028 applies. Listed small and medium-sized companies fall outside the CSRD. More on the scope is on our page about the CSRD.
ESG reporting and the CSRD
The CSRD is not a standalone reporting framework. It anchors sustainability information in company reporting law. That has consequences for the responsibility of the board and the supervisory board.
The information belongs in the management report. It therefore becomes part of the documents that are filed and public. Incorrect or incomplete information is not only a compliance matter. It also touches directors’ liability and your position towards financiers.
Dutch implementation of the amended directive must be complete by 19 March 2027 at the latest. Until then it is sensible to take the European text as the starting point and follow the national legislation.
The ESRS standards
The ESRS are the European standards for sustainability reporting. They consist of general standards and thematic standards for environmental, social and governance matters.
The standards have been revised and substantially shortened. A large share of the mandatory data points has been dropped, mainly qualitative and voluntary ones. The quantitative data largely remain. Do not expect a proportionate fall in the work inside your organisation.
The power to adopt sector-specific standards has also lapsed. Non-binding guidance will take its place.
Double materiality in practice
Double materiality is the selection mechanism of the ESRS. You do not report on everything, but on what is material. A topic is material for two possible reasons.
- Impact materiality. Your company has an actual or potential effect on people or the environment, positive or negative.
- Financial materiality. The topic creates risks or opportunities affecting your cash flows, access to finance or cost of capital.
Either one is enough to trigger reporting. In practice this means three steps. You map your own activities and your value chain. You score the topics on severity, scale, irreversibility and likelihood. You record the outcome and the reasoning in writing.
That record is the most important part legally. The auditor and the regulator assess not only the outcome but also the process. Record who was consulted, which thresholds you applied and why a topic dropped out.
Which data do you collect and record?
| Theme | Typical data | Source in the organisation |
|---|---|---|
| Climate and energy | Energy use, greenhouse gas emissions, transition plan | Facilities, procurement, engineering |
| Pollution and water | Emissions to air, water and soil, water use | Permits, environmental file |
| Resources and waste | Material flows, waste, circular measures | Production, waste contracts |
| Own workforce | Headcount, pay, working conditions, training | HR system, collective agreement records |
| Value chain | Supplier data, working conditions at third parties | Procurement, contract management |
| Business conduct | Integrity policy, bribery convictions | Legal, compliance |
Treat this data as financial data. Record per data point who owns it, which definition applies, which source you use and which control was performed. Keep the underlying documents. Without an audit trail an auditor’s opinion is hard to obtain.
The role of the auditor
The sustainability information is reviewed. The review remains limited assurance. The step to reasonable assurance previously foreseen has been dropped.
Limited assurance means a lighter test than for the financial statements. The auditor mainly assesses whether there are indications that the information is incorrect. That lowers the bar not so much for the content, but for the volume of audit work.
Involve the auditor early in the materiality assessment. Disagreement about scope is difficult to repair after the fact.
Voluntary reporting outside the CSRD
If you fall outside the CSRD, you will still be asked. Customers, banks and insurers need data for their own report or risk assessment.
For that situation there is the voluntary reporting standard for SMEs, the VSME. It has a basic module and a comprehensive module. The basic module asks among other things for energy and greenhouse gases, pollution, water, waste, workforce data and integrity.
The VSME also has a protective function. Companies with no more than 1,000 employees on average are protected against excessive information requests from the chain. No more may be asked than that voluntary standard. A contractual provision going further is unenforceable.
Check your purchasing and supply conditions on this point. An ESG annex to a framework agreement regularly goes further than is permitted.
Reporting data are not advertising claims
A common mistake is to carry reporting figures over into marketing. The legal tests differ.
An ESG report is an accountability document with explanations, definitions and limitations. An advertising claim is assessed on the impression it creates for the average consumer. A figure that is correct in the report can be misleading in an advertisement.
From 27 September 2026, stricter European rules against greenwashing apply. Generic environmental claims without substantiation and unreliable sustainability labels are no longer permitted. What this means for your communications is set out on our page about greenwashing and environmental claims.
Frequently asked questions
Must we report if we meet one threshold?
No. Under the CSRD you must have both more than 1,000 employees on average and more than EUR 450 million net turnover. If you meet one, you fall outside the obligation.
Our customer demands far more data than the VSME. Must we supply it?
If you have no more than 1,000 employees on average, no more may be asked than the voluntary standard for SMEs. A contractual provision going further is unenforceable. Supplying remains possible, but then on a voluntary basis.
When do we start preparing?
Well before the first reporting year. Collecting data over a financial year requires the systems to be in order at the start of that year. For financial years from 1 January 2027, 2026 is therefore the year to set things up.
Would you like to know whether your company falls within the CSRD, how to record your materiality assessment so that it holds up, or how to assess ESG provisions in contracts? The lawyers at Law & More are happy to think it through with you. Please get in touch for an initial discussion.
