Lessons Learned: How sustainability reporting can strengthen the competitiveness of European businesses

Filip Gregor from Frank Bold spoke at the public hearing of the European Parliament's Committee on Legal Affairs on his experience with sustainability reporting and proposals to make it more effective. Gregor is the Head of the Responsible Companies Section and a senior ESG expert at Frank Bold and also a member of the Sustainability Reporting Board at EFRAG, and presented to the Committee the results of many years of professional work and concrete recommendations for the implementation of new legislation, including the CSRD (Corporate Sustainability Reporting Directive).

Read the main conclusions and the full text of his speech.

‍Historical context and importance of regulation

Gregor recalled the evolution of European sustainability policy, which started with voluntary frameworks but gradually - especially after the 2008 financial crisis - moved towards more binding regulation. While the 2014 Non-Financial Reporting Directive (NFRD) led to a broadening of the thematic scope of corporate reports, comparability, specificity and relevance were often lacking. Frank Bold's research into hundreds of European companies' reports in the past showed that the vast majority of companies did not disclose material impacts or links to their own activities in their reports, making the data of little use to investors and the public.

‍The benefits of the CSRD and the need to support it

According to Gregor, the first analyses of the reports prepared under the new CSRD appear to be much more structured and of higher quality. However, he pointed out that quality reporting does not arise automatically, but requires clear rules and an effective methodology. ‘Without a binding framework, most companies would not report meaningful and usable information,’ Gregor said.

He also stressed that concerns about the burden CSRD imposes should be put into context - the costs are relatively small compared to the turnover of companies and the value of the data to investors. For example, firms reporting through the CDP have identified climate opportunities worth over €3 trillion, with investment costs representing only a fraction of that amount.

‍Suggestions for more efficient implementation

Following the so-called Omnibus, which is intended to facilitate the implementation of the CSRD, Filip Gregor put forward four specific recommendations:

1. Simplification and clarification of ESRS (European Sustainability Reporting Standards):

Many problems have arisen from misunderstanding of flexible requirements (e.g. materiality assessments). Experience shows that simplification can be achieved without loss of quality - e.g. Scandinavian companies have produced good quality reports in 50 pages.

2. Need for sectoral guidance:

Initial reports by the CSRD show significant differences even for similar firms in the same sector. Gregor recommends issuing methodological guidelines rather than formal standards for the time being to allow for flexibility and avoid over-regulation.

3. Support for mid-cap companies:

The Voluntary SME Standard (VSME) does not suit mid-cap companies that need more detailed guidance on how to report risks and impacts. These firms often fall back on the full ESRS, which adds complexity.

4. Ensuring functional access to value chain information:

Gregor warned of the legal uncertainty that would arise from limiting value chain requirements. He suggests clarification within the CSDDD that information should be collected on a risk-based approach, using secondary data, and that the CSRD should only require data on significant impacts and key emissions.

‍Conclusion: data as a tool for competitiveness

One main message emerged from the speech: quality reporting is not a bureaucratic burden, but a strategic tool. Companies that can capture and exploit sustainability opportunities can gain a competitive advantage. Gregor therefore urged legislators to focus on practical and data-driven improvements when considering changes, rather than weakening the overall framework.

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