Countdown to CSRD: Your 12-month plan for compliance and competitiveness

2025 marks the decisive year for companies to prepare for CSRD compliance. By next year, thousands of businesses across Europe, large multinationals and SMEs alike, will need to publish detailed sustainability disclosures aligned with ESRS standards. The countdown has officially begun, and with only one reporting cycle left to strategise, getting started now is a must.

A close-up of a man reviewing documents in an office. AI generated picture. 

For SMEs, the challenge is twofold: meeting SME CSRD requirements while also supplying data to larger corporate clients who are under even tighter deadlines. With the CSRD reporting timeline unfolding in phases, many mid-sized companies risk underestimating how quickly obligations will reach them. That’s why a CSRD 12-month plan—a practical, step-by-step roadmap—is essential for staying on track.

The momentum is already visible at the national level. In September 2025, Spain announced its new environmental emergency plan, mandating Scope 1 and Scope 2 disclosure starting in 2026 and adding Scope 3 reporting from 2028. France has adjusted its CSRD timeline with a two-year delay for some companies, while Germany has finalised its long-awaited 2025 CSRD implementation update, tightening assurance rules. These moves confirm what businesses everywhere already know: The EU’s sustainability directive is not just theory—it’s becoming enforceable law, with real consequences for those who fail to act.

The 3 scopes of emissions.

This article walks through a CSRD checklist designed as a 12-month preparation plan. We’ll unpack what’s legally required versus what’s strategically smart, explain how to conduct a CSRD materiality assessment, and outline how to align finance and sustainability reporting into one workflow. We’ll also highlight risks of non-compliance and how to engage your teams early so your company is not just compliant but positioned for long-term advantage.

Understanding CSRD and ESRS standards

At its core, the Corporate Sustainability Reporting Directive (CSRD) is designed to standardise sustainability disclosures across the EU, ensuring investors, regulators, and the public get consistent and comparable information. Unlike the older Non-Financial Reporting Directive (NFRD), the CSRD expands both the scope of companies affected and the depth of disclosures required.

Read more: What is CSRD and how does it affect your business?

The backbone of CSRD is the set of European Sustainability Reporting Standards (ESRS standards), developed by EFRAG. These cover environmental, social, and governance factors, and are built around the principle of double materiality—companies must report not only how sustainability issues impact their financial performance, but also how their activities affect people and the environment.

Under the current CSRD framework, companies fall within scope if they meet two of three thresholds. Listed companies on EU-regulated markets are also required to report, even if they don’t meet these size criteria. Non-EU companies are included if they generate at least €150 million in EU turnover and have a subsidiary or branch meeting the thresholds.

Under the proposed Omnibus simplification changes, these thresholds would become more stringent, reducing the number of in-scope companies. The new criteria would apply to companies with more than 1,000 employees and either of two thresholds. Listed SMEs would be largely excluded unless they meet the new large-company thresholds. For non-EU companies, the EU turnover threshold would increase to €450 million, alongside subsidiary or branch conditions. 

Who needs to comply under CSRD.

For SMEs, the bar is lower but still significant. SME CSRD requirements include simplified reporting templates (often referred to as ESRS for SMEs), lighter disclosure obligations, and even the option to defer reporting until 2028 if they are listed. Still, most SMEs won’t be able to ignore CSRD entirely. If they supply to larger companies, they’ll be asked for carbon footprint, workforce, or governance data as part of their clients’ own disclosures. In practice, this makes indirect compliance just as urgent. 

Luckily, The European Commission officially adopted the ‘Voluntary Small Medium Enterprise—European Sustainability Reporting Standard’, in short VSME, earlier this year. The VSME Standard is designed to give SMEs a clear, practical framework to share their sustainability information, and is split into two Modules—the Basic (11 disclosures) and the Comprehensive (9 additional disclosures). 

Read more: The VSME Standard for SMEs: Simplified ESG reporting in the EU

The CSRD reporting timeline rolls out in waves:

• 2024 reporting (published 2025): Companies previously subject to the NFRD must comply with CSRD for reporting on the 2024 fiscal year. Large public-interest companies (over 500 employees) are therefore already in scope, reporting from FY 2024 (France moved ahead quickly, while Germany delayed until FY 2025).
• 2025 reporting (published 2026): Other large companies (250+ employees) not previously covered will start reporting under CSRD for their 2025 fiscal year, depending on national transpositions.
• 2026 reporting (published 2027): Listed SMEs, except micro-enterprises, begin reporting for the 2026 fiscal year, with an optional two-year deferral until 2028. They must state the reason for opt-out in their management reports during the opt-out period.
• 2028 (published 2029): Non-EU companies with significant EU operations start reporting for the 2028 fiscal year.

This phased approach means businesses need to map where they fall on the timeline and prepare accordingly. Whether you’re in Paris, Madrid, or Munich, the requirements are converging—but the CSRD checklist and pace will look slightly different depending on national implementation. Spain is moving quickly with carbon reporting rules, France has postponed its second and third waves by two years, and Germany has tied its rollout to company size (delaying requirements for those under 1,000 employees until 2027).

In short, while sustainability reporting in the EU is harmonised in principle, the path to compliance differs by country. Understanding both the EU-level rules and your national variations is the first step to building a solid CSRD 12-month plan.

Spain, France, and Germany: Diverging paths in sustainability reporting in the EU

Although the CSRD reporting timeline is harmonised at EU level, the reality on the ground looks different depending on where your business operates. Each major economy has taken a slightly different route to implementation—something SMEs need to watch closely, since supply chain obligations don’t stop at borders.

Spain has been moving fast. Alongside its September 2025 environmental emergency plan mandating Scope 1 and Scope 2 disclosure from 2026 and Scope 3 reporting from 2028, Spain is finalising its CSRD transposition law. Spanish regulators (CNMV and ICAC) are already urging companies to align their 2024 sustainability reports with ESRS standards, even before the law is fully in force. SMEs that work with larger Spanish corporates should expect data requests this year, since the rules apply retroactively to 2025 performance.

Read more: 86% of the Spanish stock market plans to become carbon neutral

France was the first to transpose CSRD into national law back in 2023. Large companies in the first wave are already reporting under CSRD for FY2024, making France the EU’s front-runner. However, the government recognised the reporting burden and adjusted the France CSRD timeline in 2025: the second wave of large companies and listed SMEs now get a two-year postponement. For SMEs, this means breathing room, but also a warning—French regulators have emphasised that once the deadline hits, they expect companies to be CSRD audit-ready.

Germany took longer to finalise its law, with political debates delaying adoption until late 2025. Its approach is cautious: The Germany CSRD implementation 2025 update includes a carve-out for companies with fewer than 1,000 employees, who won’t need to report until 2027. At the same time, Germany insists on stricter rules for assurance: Only certified auditors (Wirtschaftsprüfer) may provide CSRD assurance, creating extra scrutiny for companies. For SMEs, this means that even if you’re indirectly affected, German clients may start tightening ESG data requests earlier than required, because their auditors will demand robust evidence.

Read more: Leading German companies: their carbon footprints and reporting practices

The takeaway? While CSRD is a single EU directive, national transposition creates nuances. Spain is emphasising speed, France is balancing ambition with pragmatism, and Germany is focusing on quality assurance and easing the load on its mid-sized firms. For SMEs working across borders, the safest strategy is to assume your clients will expect full compliance early—and to build your CSRD 12-month plan with those demands in mind.

Ropes & Gray CSRD Transportation Tracker.

A 12-month CSRD roadmap for 2026: From planning to reporting

The best way to tackle CSRD compliance is with a clear, month-by-month approach. For all businesses, it makes sense to start now. But for SMEs looking to comply with the 2026-reporting and 2027-publication deadline, it’s crucial to start their CSRD readiness this year. Here’s a streamlined CSRD 12-month plan that businesses can realistically follow:

Months 1–3: Map and assess

• Identify your reporting obligations based on the CSRD reporting timeline. Sector-specific disclosures may apply, and SMEs’ reporting is based on materiality. 
• Run a CSRD materiality assessment—what matters for your business and stakeholders? Use a CSRD materiality assessment template to structure results and assign responsibilities.
• Start mapping your carbon footprint and gathering baseline data for energy, HR, and supply chains to meet Scope 1 and Scope 2 disclosure needs. CO₂ emissions is a key factor for CSRD reporting. It’s your business’ sustainability strategy starting point.

Months 4–6: Build workflows

• Align finance and sustainability reporting teams to avoid silos.
• Start creating CSRD workflow alignment processes for data sharing across departments.
• Create plans to start addressing your carbon footprint. Implement carbon reduction strategies and compensate for emissions you cannot yet reduce with high-integrity carbon units.

Months 7–9: Test and strengthen

• Pilot your reporting system with a dry run—check where CSRD data collection falls short.
• Reinforce CSRD internal controls for ESG data to ensure accuracy and traceability.
• Prepare for early requests from clients needing Scope 3 reporting inputs.

Months 10–12: Assure and communicate

• Work towards CSRD audit readiness with external verifiers. For instance, in Germany, there are stricter CSRD requirements tied to financial auditors.
• Finalise reports and establish a CSRD communication plan to investors and banks, highlighting not just compliance but strategy.
• Complete your internal CSRD checklist so nothing is missed ahead of formal filing.

Read more: SME sustainability tools: How they help your business grow

This roadmap isn’t just about ticking boxes. Following it ensures your company is ready for scrutiny while turning compliance into a foundation for trust and opportunity.

What’s legally required vs what’s smart to include

One of the biggest challenges companies face is separating the minimum CSRD compliance requirements from the strategic opportunities that can set them apart.

Legally required under CSRD:

• Reporting aligned with ESRS standards across environmental, social, and governance topics.
• A documented CSRD materiality assessment showing how sustainability issues affect your company and vice versa.
• Annual disclosure of core environmental metrics, starting with Scope 1 and Scope 2 disclosure, and later expanding to Scope 3 reporting.
• Verification through limited CSRD assurance, moving towards reasonable assurance over time.
• Integration of your sustainability report into your management report, filed in the required digital format.

Read more: Aligning with CSRD: the smart move for future-proofing your business

Smart to include in your CSRD checklist:

• A forward-looking emissions reduction and compensation strategy—Spain now requires five-year reduction plans alongside carbon reporting, showing the EU trend towards mandatory planning.
• Deeper engagement with your supply chain. Even if you’re not required to disclose full Scope 3 reporting yet, collecting this data early will reduce friction when your clients demand it.
• Building robust CSRD internal controls for ESG data so your information holds up under audit scrutiny. Germany, for instance, has tightened its CSRD assurance requirements, meaning companies will need stronger evidence trails.
• Embedding ESG metrics into core decision-making. Aligning finance and sustainability reporting processes helps identify risks and opportunities early, rather than treating ESG data as a compliance afterthought.

Read more: Carbon footprint offsetting strategies: How leading companies neutralise their emissions

Put simply, compliance may keep regulators satisfied, but going beyond the basics positions your company for resilience and growth. Early movers are already using CSRD as a platform to win contracts, attract investors, and unlock green financing.

The risks of non-compliance

The price of falling behind on CSRD compliance is steep. The risks aren’t only regulatory—they ripple across finance, reputation, and competitiveness.

An office meeting featuring graphs on a screen. AI generated picture.

Financial and legal penalties

The costs of failing to meet CSRD compliance are substantial and growing. Penalties vary across Europe, but some national regimes already set steep fines. For example, a recent inquiry shows Spain may levy fines ranging from €30,000 to €300,000 for non-compliance, the Netherlands reserves a fine range of €10,000 up to €900,000, in Sweden fines can be as high as €1 million, while in Germany fines could reach €10 million or 5% of turnover. 

Beyond direct financial penalties, companies risk being publicly named, losing investor confidence, and triggering regulatory investigations. Because CSRD assurance is now mandatory, missing or unreliable disclosures may lead auditors to issue qualified opinions, which can jeopardise access to capital. 

Reputation and investor trust

Investors and banks increasingly see sustainability reporting in the EU rules as a baseline expectation. Missing deadlines or producing low-quality disclosures undermines confidence and can lock your company out of capital markets. That’s why building a clear CSRD communication plan to investors and banks is as important as producing the report itself.

Operational disadvantage

Failure to integrate CSRD internal controls for ESG data puts companies at risk of unreliable reporting and last-minute scrambling. Even SMEs not directly in scope will feel the squeeze—clients subject to Scope 1 and Scope 2 disclosure and Scope 3 reporting will demand verified data from their supply chains. Not being ready means losing business to more transparent competitors.

Read more: Overcoming sustainability challenges: practical solutions for your business

In short, non-compliance carries real-world consequences. And unlike past sustainability frameworks, CSRD has the regulatory teeth to enforce action.

Turning compliance into a competitive advantage

For many businesses, the CSRD checklist looks like a mountain of obligations. But companies that treat CSRD as more than a box-ticking exercise often discover something bigger: It can sharpen operations, reduce costs, and open doors to new capital and markets.

Access to financing: Banks and investors are aligning their portfolios with EU sustainability goals. A company that is CSRD audit-ready and presents clear, verifiable disclosures has a much stronger case for favourable lending or investment. France’s regulators have been explicit: Companies that delay may risk reputational penalties, while early movers can strengthen investor trust.

Operational resilience: By aligning finance and sustainability reporting, companies create a clearer picture of risks and opportunities. Spain’s new mandate requiring five-year reduction strategies is a signal that forward planning isn’t optional. Companies that anticipate this shift will not only meet Scope 1 and Scope 2 disclosure rules but also position themselves to lead on Scope 3 reporting, which clients and supply chains increasingly demand.

Read more: SME carbon footprints: a practical guide

Competitive differentiation: Germany’s focus on strict CSRD assurance requirements means companies able to provide reliable, verifiable data will gain an edge. For SMEs, this is an opportunity: even if they are not directly in scope yet, delivering transparent ESG data early makes them preferred suppliers for larger corporates.

Green Earth’s projects. Source: https://www.green.earth/projects 

Seen this way, CSRD is less about compliance and more about future-proofing. A solid CSRD 12-month plan helps SMEs demonstrate credibility, win contracts, attract investment, and build reputations that carry weight beyond regulations. Compliance doesn’t just keep you out of trouble—it positions you as a leader in a market that increasingly values sustainability as a core business metric.

One year, one chance: Do it right with Green Earth

2025 is the last full year before CSRD transforms from preparation to enforcement. For SMEs, that means the window to act is closing quickly. A clear CSRD 12-month plan, aligned with ESRS standards, gives you structure. But tools and support are what make the difference between scrambling at the deadline and leading with confidence.

This is exactly where the Green Earth CO₂ Expert tool comes in. While many businesses struggle with spreadsheets and rough estimates, our tool goes beyond broad averages to measure your actual emissions across scopes and activities—helping you meet CSRD compliance requirements with accuracy and ease.

With the CO₂ Expert, you get:

• Effortless setup—create an account and invite multiple users to collaborate.
• Flexible scope—cover all locations and emission scopes for a full footprint.
• Automatic calculations—built-in emission factors deliver fast, precise results.
• Clear dashboards—intuitive breakdowns highlight where your emissions come from.
• Expert validation—our specialists review your data for credibility.
• Direct compensation—purchase carbon units from high-integrity projects and receive certificates you can share with stakeholders.
• Audit-ready reports—download detailed carbon footprint reports that support CSRD audit readiness.
• Share with confidence—ready-to-use communication materials help present results to investors, clients, and banks.

CSRD is all about future-proofing your business and showing leadership in a market where sustainability is becoming the new baseline. With the right plan and the right tools, you can move from reacting to shaping the future.

Your one year starts now. Prepare to take the first step: map your reporting obligations, engage your teams, and use the CO₂ Expert to build a reporting baseline that is credible, efficient, and impactful. Compliance is the floor—competitiveness is the ceiling.