CSRD: The future of sustainability reporting in the EU

28 Oct 2025

Sustainability

Companies in the EU face different obligations in terms of what they must disclose about the sustainability of their operations. Yvonne Holmes, Director of Group Sustainability and Corporate Affairs for DCC plc, gives her view on the Omnibus simplification that is being proposed for CSRD regulation.

Corporate sustainability reporting is going through an overhaul. In a bid to enhance transparency and comparability across non-financial data, the EU introduced the Corporate Sustainability Reporting Directive(CSRD) to replace 2014’s  Non-Financial Reporting Directive (NFRD).

The course to action has seen some changes along the way. While the original CSRD legislation was set to cover roughly four times as many businesses as the NFRD, the ‘Omnibus I’ package adopted by the European Commission (EC) in early 2025 proposed easing some of these requirements to reduce administrative burdens and support a more favourable business environment in the EU. Reporting timelines were also postponed, and the move from limited to reasonable assurance may be delayed pending further review.

“I think it’s important for genuinely small firms, but if taken too far it risks being a step back for transparency and comparability across value chains,” warns Yvonne Holmes, Director of Group Sustainability and Corporate Affairs at DCC. “Simplification is attractive, nobody wants complexity, but raising the threshold and narrowing the scope means a huge number of midsize companies won't be required to comply. These companies are not minor players; they're deeply embedded in the European and global supply chains. If they're taken out and not disclosing and providing the information that's required, it weakens the visibility of risks across the entire sector.”

The European Sustainability Reporting Standards (ESRS), constructed by the European Financial Reporting Advisory Group (EFRAG), entered the picture in July 2023 to underpin the CSRD, replacing voluntary standards businesses could previously select from to frame their disclosures. These have also changed as part of the Omnibus proposal, with a more simplified framework to be submitted for review by the EC by the end of November 2025.

If midsize companies are taken out of scope and not disclosing and providing information that's required, it weakens the visibility of risks across the entire sector.

Yvonne Holmes

Director of Group Sustainability and Corporate Affairs, DCC plc

As a FTSE 100 company, a certain amount of DCC’s externally assured reporting was already in place, so the shift isn’t as great as some other companies might be experiencing. "This is more about maturing our processes than starting afresh," says Yvonne. “The Omnibus isn’t fundamentally going to change what we were doing and planning to do. We feel the more we disclose and the more transparent we are, it creates differentiation and makes us more appealing from our stakeholders’ perspective.”

She further explains DCC’s approach to partnering with the right companies, using a robust third-party management process and always looking for ways to strengthen it in terms of quality, safety, integrity, compliance and sustainability. “Supplier selection and management is decentralised across the businesses and that's part of the operating model of DCC,” Yvonne says. “But it's guided by group policies on supply chain integrity, human rights, and responsible sourcing.”

While DCC may be advanced with its reporting, even being shortlisted for Sustainability Disclosure of the Year at the CGIUKI Awards 2025, there is still work to be done to continuously improve. One of the most challenging areas is the supplier ecosystem. The reality is that the most significant environmental and human rights risks often lie deeper in the supply chain — in raw materials, subcontracted labour, or outsourced manufacturing. However, the simplification proposes narrowing sustainability due diligence to direct suppliers only, and exempting mid-sized firms removes pressure on these crucial links, making it more difficult to embed sustainability across global supply networks. The EU should support mid-sized companies in meeting high standards through phased timelines and not exempt them from responsibility.

We feel the more we disclose and the more transparent we are, it creates a differentiation and makes DCC more appealing from our stakeholders’ perspective.

Yvonne Holmes

Director of Group Sustainability and Corporate Affairs, DCC plc

A step-change in transparency

Overall, Yvonne sees the CSRD regulation as beneficial and a sign of progress. "Until now, businesses only needed to look at how social and environmental issues might impact their profits, their viability. That was impact from the outside in, if you like," she explains. "It’s now mandatory to go beyond the single materiality of financial impact and report on your own impact and that of your value chain on society and the environment. That’s the ‘inside out’ part of the equation, known as double materiality.”

Although it may be viewed as complex, Yvonne views the CSRD compliance process as helpful to organisations wanting to reach certain sustainability goals. "To me, this is baselining the information, focusing accountability within an organisation and saying: ‘We need to achieve this; these core targets need to be in everyone’s objectives,’" she says.

Will CSRD lead to real-world accountability?

Critics may call sustainability reporting "window-dressing for the financial markets," but Yvonne vehemently disagrees. "No, I am a strong believer in setting high expectations around transparent reporting," she insists. “It creates a situation where all boats will rise with the tide as a result of more action driven by increased disclosures.

"Complying with CSRD doesn’t distract us from doing the things that are core to our energy transition strategy, like reducing emissions in our fuels by introducing biofuels and expanding into the energy services business which includes roof-top solar installation. That activity is full on, backed by authentic ambition."

One of the areas that Yvonne is happy to see retained in the Omnibus simplification proposals is the need for companies to disclose on their transition plans. These are critical in ensuring that companies have a plan to mitigate transition risk and their impacts on the environment and are executing on it.

Having a strategic plan amid a sustainability-driven market is beneficial both for reputation and value creation, especially as Yvonne is confident that CSRD will evolve further: “One would expect that limited assurance will mature quickly in terms of making sure the controls are in place around the quality of the data being reported and assuring that narrative disclosures are backed up with hard evidence. For example, more assurance and testing on forward-looking statements and data like targets will help investors or stakeholders to make decisions.”

Disclosure regulation is essential for ensuring transparency, comparability, and accountability. However, frequent amendments undermine legal certainty, stalls momentum and erodes trust in the EU’s regulatory stability.

"We need stable regulation and for it to extend to all significant market participants and drive much needed progress, helping to create climate and social leadership,” Yvonne concludes. “Ultimately, it is about safeguarding our environment and society against catastrophic harms. There can’t be room for inaction.”

28 Oct 2025