Should we wait to start ESG reporting?

Yes. While the EU is proposing to delay or simplify some requirements, ESG remains a key factor for investors, customers, and regulators. Double materiality analysis and carbon accounting are essential tools for setting a clear direction, and sustainability efforts are becoming more critical for competitiveness and reputation.

If your company is in Wave 1, you must report for 2024.

If your company falls into Wave 2 (2025) or Wave 3 (2026), the EU is proposing a two-year delay. 

After the transition period ("stopwatch"), the sustainability reporting requirements will only apply to large companies and parent companies of large groups. This includes businesses with more than 1,000 employees in the company or group, as well as those meeting the criteria for turnover or balance sheet total.

The proposal removes the reporting obligation for listed companies, meaning they will only be covered if they meet the requirements for the number of employees, turnover, or balance sheet total.

We still recommend preparing now, to avoid bottlenecks later.

Delaying ESG reporting could create several challenges:

• Time and resource constraints when requirements come into effect, or when customers demand sustainability data.
• Low-quality ESG data and poor insight into future business risks.
• Reduced competitiveness in tenders and customer relationships due to missing or low-quality data.

Companies that start now will benefit from a smoother and more cost-efficient transition, gaining early insights into risks that could impact their business in the future.

The focus should be on streamlining data collection and automating ESG and decarbonisation reporting. This improves reporting quality and reduces manual workload in the long term.

We recommend:

• Carbon accounting – make your company’s climate impact visible.
• Double materiality analysis – understand your company’s impact and risks.

• Climate and nature risk assessments – gain valuable insights for transition and business resilience.

• Integrate ESG into your strategy – ESG is not a separate project; it should be part of your core business strategy.

Voluntary reporting (for companies outside Waves 1–3) provides a strong market advantage and helps businesses stay ahead of future regulatory requirements.
 
Mandatory reporting applies to large companies and will impact entire value chains, including smaller suppliers.

• Automate data collection – avoid manual processes.
• Use relevant standards (ESRS or VSME) – ensure comparability and efficiency.

• Choose the right tools – Metizoft helps businesses transition smoothly to ESG reporting.