ESG & corporate sustainability

Following the approval of the Omnibus I package by the European Parliament on 16 December 2025, the situation for SMEs has changed significantly:

• Listed SMEs are fully removed from the CSRD scope.
  The CSRD is now definitively limited to large companies with more than 1,000 employees and a turnover exceeding EUR 450 million.
• Value chain protection:
  Once the rules enter into force, companies with fewer than 1,000 employees will not be required to provide information beyond the voluntary VSME standards. If reporting companies nevertheless attempt to contractually require additional information, such provisions will not be binding.

The agreement still requires formal approval by the Council of the EU, expected in early 2026. Following publication in the Official Journal, the changes will enter into force 20 days later.

In short, SMEs (listed or not) will no longer fall under the CSRD reporting obligation and are explicitly protected against excessive information requests from within the value chain.

Absolutely. Even without reporting requirements, sustainability today has a direct impact on the operation and future of your business.

• Customers, banks, investors and larger partners are increasingly asking questions about environmental and social performance, regardless of whether your company falls under the CSRD.
• Moreover, as part of a value chain, sooner or later you will be asked to provide sustainability information, for example as part of due diligence obligations or tenders.
• Corporate sustainability also strengthens your reputation, reduces operational risks and helps you save costs in terms of energy, raw materials and waste.

In short, sustainability is not a legal checkbox, but a strategic advantage even for smaller or non-reporting companies.

The ESRS (European Sustainability Reporting Standards) define how companies under the CSRD must report on sustainability (ESG).
The original ESRS standards, approved in 2023, remain fully applicable to Wave 1 companies. These companies must continue to report in accordance with the original standards. However, a limited “quick fix” applies, allowing certain data points and disclosures to be provided in a phased or simplified manner. This reduces implementation pressure without removing the substantive reporting obligations.

In the context of the Omnibus agreement at the end of 2025, work is also underway on amended ESRS standards for companies that will fall under the CSRD at a later stage. These simplified ESRS standards are currently in the approval phase and will apply to later reporting waves.

In summary:
Wave 1 → original ESRS + limited quick fix
Later application → amended (simplified) ESRS

While CSR (Corporate Social Responsibility) often involved non-committal, goodwill-based initiatives, CSRD is a mandatory framework, financially relevant and deeply integrated into business operations:

• ESG carries legal implications, including compliance with CSRD regulations.
• ESG is linked to legislation such as the CSDDD.
• It affects access to capital because investors use ESG criteria

CSR was often a separate function, while ESG aspects include risk management, strategy, financial and operational aspects and requires measurable KPIs that are comparable across companies.

Absolutely. Even without reporting requirements, sustainability today has a direct impact on the operation and future of your business.

• Customers, banks, investors and larger partners are increasingly asking questions about environmental and social performance, regardless of whether your company falls under the CSRD.
• Moreover, as part of a value chain, sooner or later you will be asked to provide sustainability information, for example as part of due diligence obligations or tenders.
• Corporate sustainability also strengthens your reputation, reduces operational risks and helps you save costs in terms of energy, raw materials and waste.

In short, sustainability is not a legal checkbox, but a strategic advantage, even for smaller or non-reporting companies.

Financial institutions and investors are placing increasing importance on ESG criteria in their decisions and capital expenditures and loans.

ESG data are used to assess risks (such as climate risks or reputational damage) and to compare sustainability risk profiles. They help determine access to credit, insurance, and favorable financing terms.

A strong ESG profile can thus lead to better financing conditions, increased investment interest and thus a higher valuation (value) of a company.

European ESG regulation consists of a coherent framework that embeds sustainability into reporting, risk management, and market access. The main pillars are:

• CSRD (Corporate Sustainability Reporting Directive)
  Mandatory ESG reporting for large companies, in accordance with the ESRS standards.
• EU Taxonomy Regulation
  Classifies which economic activities are considered sustainable, primarily relevant for financial markets.
• SFDR (Sustainable Finance Disclosure Regulation)
  Transparency requirements for financial institutions regarding sustainability risks and impacts.
• CSDDD (Corporate Sustainability Due Diligence Directive)
  Obligations related to human rights and environmental due diligence throughout the value chain.
• EUDR (EU Deforestation Regulation)
  Requires companies to demonstrate that certain products are deforestation-free.

In addition, there is a wide range of more specific European legislation that is already in force or in the pipeline, such as ETS2, CBAM, ecodesign and product legislation, chemicals regulation, and sector-specific obligations. These rules often have a direct operational and financial impact, independent of CSRD reporting.

Companies falling under the CSRD are required to have their sustainability reporting audited by an external auditor. This independent assurance ensures that your sustainability information is accurate, complete, and aligned with ESRS standards.

Within this legislation, limited assurance is the standard today. This process includes:

• verifying internal controls and processes
• validating data systems
• testing of KPI calculations
• Assess whether the information presents a true and fair view of your ESG performance

External verification not only increases reliability for stakeholders, but also helps your organization identify and improve weaknesses in data management and processes.

To measure ESG performance, start from a systematic approach with specific KPIs for each pillar:

• For Environmental, for example, you measure CO2 emissions (Scope 1, 2 and 3), energy consumption, water use, waste production and circular material use.
• Social includes employee satisfaction, diversity and inclusion, occupational safety, training and development, and community impact.
• Governance includes diversity within the board of directors, ethical incidents, compliance violations and transparency in compensation structures.

Also, use various methods to clearly chart progress and adjust as needed: set SMART goals, implement a dashboard for periodic tracking, and regularly report on progress to management and stakeholders. Provide external verification of key metrics to increase credibility.

VSME stands for Voluntary Sustainability Reporting Standard for SMEs, a simplified framework for small businesses that wish to report voluntarily or are requested by business partners to report about their sustainability performance.

The EU Taxonomy is a classification system that defines which economic activities can be considered environmentally sustainable. It sets out six environmental objectives—ranging from climate change mitigation to biodiversity protection—and establishes technical criteria that activities must meet to qualify.

Under the CSRD, companies must disclose what share of their revenue, capital expenditure (CapEx), and operating expenditure (OpEx) is taxonomy-aligned. This creates transparency for investors on how much of a company’s activities truly contribute to sustainability goals and helps prevent greenwashing.

The upcoming Omnibus proposal, however, introduces a relaxation of certain EU Taxonomy reporting requirements.

Material ESG topics are sustainability issues that

• either have significant financial impact on your business (outside-in perspective)
• either where your business has significant impact on people and the environment (inside-out perspective)

This dual perspective is also called the dual materiality analysis mentioned where stakeholders are also consulted and risks and opportunities are assessed. Examples include climate change in agriculture or energy-intensive sectors, working conditions in the manufacturing industry, or water management on farms.

Belgium has formally transposed the CSRD into national legislation. This means that the European sustainability reporting rules apply directly to Belgian companies that fall within the CSRD scope.

In concrete terms:

• Wave 1 companies in Belgium remain required to report in accordance with the original ESRS standards, including the limited European quick fix.
• Other companies are subject to the amended CSRD scope as set out in the Omnibus agreement (including the thresholds of >1,000 FTE and ≥ EUR 450 million in turnover), with a phased application towards 2028.

Companies that do not fall within the scope of the CSRD are not legally required to report, but in practice they are still confronted with sustainability information requests from banks, investors, and customers, often through proportional frameworks such as VSME.

The Omnibus proposal launched by the European Commission in February 2025 was politically approved by the end of 2025 and now defines the new contours of CSRD implementation. The key implications are:

• Limitation of the CSRD obligation to companies with more than 1,000 employees and EUR 450 million in turnover.
• Postponement of the reporting obligation for many companies (wave 2) until 2028.
• A clear focus on simplification and reduction of the reporting burden in order to support European competitiveness.

Although the policy framework is now fixed, further technical and national implementation will continue to be refined throughout 2026. This calls for a balanced approach today.
Our advice: work proportionally and in phases.

• Non-CSRD-obligated companies should focus on pragmatic frameworks such as VSME.
• CSRD-obligated companies can prepare for reporting in a phased manner and should already invest in core building blocks such as governance and risk analysis, without over-implementation.

Please note: wave 1 companies (i.e. companies that already fell within the original CSRD scope in 2025) remain required to report in accordance with the original ESRS standards, but they may make use of certain transitional reliefs during the implementation phase (in the first years).

The CSRD (Corporate Sustainability Reporting Directive) is a European directive that requires large companies to report on sustainability (ESG).

Following the Omnibus agreement at the end of 2025, the CSRD obligation in principle now applies only to companies with more than 1,000 FTE and a turnover of at least EUR 450 million, with a phased implementation whereby effective reporting for many companies starts in 2028 (the so-called Wave 2 companies).

Wave 1 companies (i.e. companies that already fell within the original CSRD scope) remain required to report in accordance with the original ESRS standards.
Companies that do not (or no longer) fall within the scope of the CSRD are not subject to mandatory reporting, but in practice they are still required to provide sustainability information to banks, investors, and customers, often through proportional frameworks such as VSME.

ESG stands for Environmental, Social and Governance. These are the three pillars by which companies measure and report their sustainability performance:

• Environmental concerns environmental impacts such as climate and biodiversity.
• Social includes workers and communities.
• Governance is about corporate leadership and ethics.

CSR (Corporate Social Responsibility) is doing business with attention not only to financial profit, but also to people, the environment, and society. In doing so, companies consciously take into account the impact of their activities on all stakeholders.