CSRD Doesn’t Apply to Us Anymore. Or Does It?

Under the amended rules, CSRD now applies only to companies with more than 1,000 employees. That reduced the number of directly reporting companies by roughly 80%, from around 49,000 to about 10,000 across Europe.

For many SMEs, that sounded like a welcome exit, but in practice, CSRD hasn’t gone away. It has simply moved downstream.

CSRD is no longer a reporting problem, it’s a supply-chain data problem

Large companies still need to comply with CSRD. To do that, they require primary sustainability data from their value chains, including:

• suppliers
• subcontractors
• service providers
• logistics partners
• manufacturers
• professional services firms

…In other words: SMEs.

Why SMEs Are Still Being Asked for Sustainability Data

So while you may no longer be legally required to publish a sustainability report, you are increasingly required to provide data to customers who are. This is why many companies are now receiving:

• ESG questionnaires from multiple clients (e.g. VSME)
• Requests for emissions, energy use, policies, or risk information
• Slightly different questions, asked in different formats, with different timelines

Underestimated Hidden Costs of Supply-Chain Data

When companies talk about CSRD costs, they usually talk about the big numbers: consultants, audits, systems. What gets overlooked is the supplier-side burden.

What Wave 1 CSRD Companies Have Already Seen

• Value-chain data collection is one of the top three cost drivers
• 61% delayed supplier disclosures using phase-ins, simply because it was too heavy to manage at once

What One Data Request Actually Costs a Supplier

• One ESG data request costs a supplier about €552
• ~18 hours of internal work
• Coordination across teams
• Chasing missing data

Simplified ESRS standards are expected to reduce that cost by about 25%, or €138 per request

That might sound doable, until you serve 10, 15 or 20 customers. Then the same work is repeated again and again.

Where the €4.7 Billion in CSRD Cost Savings Comes From

The amended ESRS standards are expected to deliver:

• €3.7 billion: CSRD-reporting companies
• €1.1 billion: Supply chains
• €4.7 billion total (2027–2031)
• 44% of previous costs

These savings don’t come from doing less reporting, they come from handling data differently.

What Actually Reduces Costs

The Main Drivers of Cost Reduction

• Fewer mandatory data points
• Clearer standards
• Better alignment between financial and sustainability information

The SMEs That Benefit Most Are the Ones Who

• Know what data is actually relevant
• Produce it consistently
• Reuse it across customers

What smart SMEs are doing instead of “waiting and see”

The SMEs who cope best are not trying to become reporting experts. They are doing three simpler things:

1. Owning their sustainability data

• One internal source of truth
• Not scattered across spreadsheets and emails

2. Standardising responses

• Same data, shared with multiple customers
• Less rework, fewer errors

3. Reducing downstream assurance pain

• Clear, traceable data upfront
• Fewer questions later from customers, auditors, or banks

How ImpactOS Helps SMEs Handle CSRD Supply-Chain Data

ImpactOS helps not as reporting software, but as data infrastructure for SMEs in supply chains. The value is not the report. The value is:

• Cleaner, more consistent sustainability data
• Lower admin and consulting costs
• Far less duplicated work across customers
• Less stress every time a customer asks: “Can you send us your sustainability data?”

The real shift SMEs should pay attention to is this:

CSRD is no longer mainly about who must report. It’s about how efficiently data moves through supply chains. For SMEs, the most cost-effective position is not outside the system, it’s well prepared within it: the right data, in the right place, ready to be (re)used, and genuinely beneficial to your business.

Data & Sources

This article references cost and impact estimates from EFRAG’s Cost-Benefit Analysis on Draft Amended ESRS (2025). Figures are used to illustrate implications for SMEs and supply chains.