The year 2025 marked a major shift for European business in ESG reporting. Large companies faced their first mandatory ESG reports. The Corporate Sustainability Reporting Directive (CSRD) set new rules. Deloitte analyzed 126 entities across nine Central European countries. These nations included Romania, Poland, and the Czech Republic. The findings revealed a difficult transition period.
Findings:
The primary hurdle was complexity. Companies struggled to link sustainability facts to financial data. Most organizations kept these two departments in separate silos. This disconnect made it hard to calculate monetary risks. Only a small fraction of firms presented quantified financial effects. Qualitative descriptions remained the common standard for now.
Data:
Reporting on expenditures proved especially taxing. Companies had to disclose CapEx and OpEx for ESG actions. Only 42% of reports provided these specific numbers. Data for the circular economy was even rarer at 13%. Most firms admitted they had a limited ability to estimate these costs. Financial integration remains the biggest goal for the future.
Materiality:
Materiality assessments showed clear priorities. Almost every company focuses on its own workforce. Climate change was another nearly universal concern. However, biodiversity received very little attention. Only 34% of firms considered it a material topic. Affected communities also ranked low on the list of priorities.
Leadership:
Management pay is starting to change. Almost half of the companies now use ESG incentives. These targets cover environment, social, and governance areas. Financial services lead this trend at 64%. Romania actually beat the regional average at 53%. Common goals include decarbonization and better diversity.
Industry:
Industry-specific reporting added another layer of work. Most sectors included unique matters like cybersecurity. Technology and healthcare firms led this effort. Auditors now view this first year as a valuable benchmark. It showed that companies can adapt to high standards. The next phase will require even more precise data.
Thought leadership:
“Sustainability reporting implies extracting insights from ESG-related information and facts and turning them into valuable business data. In fact, entities reporting under International Financial Reporting Standards have a real opportunity to connect sustainability reporting with financial reports… This connection contributes to risk management improvement and to long-term financial stability,” said Corina Dimitriu, Audit & Assurance Partner, Deloitte Romania.
“Despite the challenges encountered, the first year of reporting as per CSRD requirements demonstrated companies’ capacity to adapt. Sustainability reporting is a long-term requirement that needs defining new processes or refining existing ones, which is why a benchmark exercise is extremely valuable at this stage,” said Oana Ionică, Director, Audit & Assurance, Deloitte Romania.
