Frank Bold published the results of a study on the first year of the implementation of the EU Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS) (October 2025). The study is based on an analysis of 100 companies (45 from Western Europe and 55 from Central and Eastern Europe) operating in “high-impact” sectors like finance, energy, textiles, food and beverages and manufacturing.
Human Level’s Take:
- Frank Bold finds that the CSRD and ESRS have improved the quality, consistency and comparability of sustainability reporting across companies. This progress shows that the regulations provide a strong foundation for better disclosures.
- However, key gaps remain, especially in areas like double materiality assessments, climate transition plans, and biodiversity impacts, where reporting often lacks specificity and depth.
- In a closer look at materiality, due diligence, and governance, most companies describe their processes but often fail to provide more detail on the methodologies and tools they use to assess impacts, risks and opportunities. In addition, most are not prioritising high-risk areas in the value chain, focusing more on generic sectoral risks and limiting company-specific insights.
- While nearly all companies report on sustainability governance, Frank Bold finds that many companies do not report that their governance bodies receive detailed information or have active involvement in sustainability issues. This suggests that senior-level oversight and attention on sustainability issues is still not widespread.
- Reporting is more than just a compliance exercise, it’s an opportunity for a company and its stakeholders to better identify key risks and opportunities and improve resilience. To turn reporting into a tool for better due diligence, Frank Bold offers three recommendations for companies. First, strengthen understanding of sustainability risks and improve climate transition planning aligned with the requirements of the ESRS. Second, integrate due diligence into double materiality assessments and conduct a mapping to identify where risks show up across the value chain. Third, prioritise high-risk areas in the value chain to help inform better risk and impact management.
Some key takeaways:
- A foundation for better reporting, with room for improvement: Overall, Frank Bold finds that the CSRD has broadly advanced company progress on sustainability reporting, resulting in reports that are more complete and comparable across different companies. In parallel, the ESRS has been successful is bridging gaps in content and comparability that were common under the previous Non-Financial Reporting Directive, as report are now more consistent, understandable and comparable across companies. At the same time, there are some areas where companies are not providing enough information for meaningful disclosure. For example, when it comes to double materiality assessments, the lack of specific guidance within the ESRS has meant that companies often rely on more generic templates, which can make it difficult to gain company-specific insights about risks. As another example, more companies are disclosing climate transition plans, but many of them lack specifics required by the ESRS, like how they align with the 1.5°C target and how external factors could delay achievement and increase transition risk. In addition, few companies provide detailed information on their impacts to biodiversity, which Frank Bold notes could be because of limited knowledge and tools. All in all, Frank Bold believes that the new standards set by the CSRD and ESRS provide a foundation from which to build stronger reporting practices, as well as the actions they drive like climate risk assessments, transition planning and sustainability due diligence. That said, this progress is not set in stone — changes to the legal framework could undermine the stability and predictability needed for quality, meaningful sustainability disclosure.
- Deeper dive into reporting on materiality, due diligence and governance: These areas reflect both progress and room for improvement. When it comes to reporting on double materiality, all 100 companies describe their process, although most do not explain the tools and methodologies used to identify impacts, risks and opportunities (IROs). Frank Bold also notes that, where tools are mentioned in reporting they are typically environment-related and largely external, rather than part of internal impact assessment processes. While many companies include their value chain as part of the materiality assessment, most are not prioritising high-risk areas or providing information on their screening approach, which Frank Bold points out could limit the usefulness for both companies and report users. In addition, very few companies explain their materiality thresholds, with most referencing severity and likelihood as factors but providing limited information on how these were scored or why impacts are considered material. Almost half of companies provide details on their IROs, however the link between IROs and business strategy is not often made, meaning that companies may not be systematically integrating sustainability into strategic decision-making. Positively, almost all of the companies include a dedicated section on sustainability governance, which suggests that company governance bodies are informed about the risks identified. However, company reporting in this area shows that not all governance bodies are receiving information about mitigation effectiveness, stakeholder inputs or due diligence implementation. Further, there seems to be limited involvement of governance bodies in specific sustainability issues or follow-up on how IROs are managed in practice.
- Recommendations for business: Frank Bold outlines three recommendations for companies to strengthen their sustainability reporting and ensure that meaningful reporting feeds into effective practice. First, they will need to improve their understanding of sustainability risks and strengthen climate transition planning, incorporating information on decarbonisation levers, alignment with the 1.5°C target, information on investment strategies, and locked-in emissions and external factors affecting decarbonisation goals. Second, they can better link sustainability due diligence and the double materiality assessment process by relying on existing due diligence practices to assess IROs and conduct value chain mapping. Third, they need to prioritise high-risk areas in their value chain assessments. This requires diving deeper into parts of the value chain where impacts and risks are most likely to occur.
