Reporting Requirements Are Easing. Expectations Are Not.

It’s happening: both the CSRD (Corporate Sustainability Reporting Directive) and the CSDDD (Corporate Sustainability Due Diligence Directive) are being significantly simplified.

Across both directives, thresholds are rising, scope is narrowing, and reporting obligations are becoming lighter. Changes include a reduced company scope for CSRD and streamlined due diligence requirements in CSDDD.

These changes are positive in many ways. Reducing administrative burdens, particularly for SMEs, makes sustainability efforts more accessible. It’s a welcome recognition that complexity should not be a barrier to action.

But amid the relief, it’s worth stepping back and remembering why these regulations were introduced in the first place.

Regulations are necessary because markets alone don’t correct unsustainable practices. Somewhere along the way, we risk losing sight of the fact that regulation wasn’t designed to create paperwork or fuel an industry of checklists.

The CSRD was intended to bring transparency to corporate practices, enabling better decisions by investors, customers, and society.
The CSDDD was meant to hold companies accountable for human rights and environmental impacts across their supply chains; not to create a compliance exercise disconnected from real-world outcomes.

Simplification is good, but there is a real risk that, in easing supply chain due diligence, we also lose the ability to uncover credible risks.

Without proper and continuously improving visibility into supply chains, many risks will simply go unnoticed. Compliance will prevail, but it will be compliance in form, not in spirit; the real issues will remain at ‘local newspaper’ -level, far from scrutiny.

This is why companies must not treat these regulatory changes as a reason to relax. Instead, they should see them as an opportunity to engage their supply chains with real commitment, aligned with the original spirit of the regulations, and to use primary data not just for compliance, but for better business.

The companies that understand why sustainability matters (not just how to “tick the box”) will be the ones who build lasting resilience, trust, and competitive advantage.

Those who stay the course will win.

Just as companies that embraced digital transformation early became market leaders, those who invest today in understanding their supply chain risks and opportunities through primary data will set the pace for tomorrow’s economy.

Regulations may evolve, thresholds may rise, and timelines may shift, but the direction is clear, and the direction will not change.

The fundamental business reality remains the same: the only way to survive and thrive is to understand the risks and opportunities hidden in your supply chain. And the only way to do that is through primary data: the real, company-specific information that reveals where you are exposed, where you are strong, and where you can lead.

At ImpactOS, this has always been our focus. We believe that by simplifying sustainability management, enabling primary data generation, and aligning with standards like VSME, we can help companies not just comply, but compete, grow, and build resilience for the long term.

The regulations may be lighter.
The responsibility to act is not.

Author: Sami Tornikoski
Head of Sustainability, ImpactOS