CSRD Reporting During Mergers and Acquisitions

Mergers, acquisitions and carve-outs can make sustainability reporting feel messy fast. For small and growing businesses (SMEs), the worry is simple: how do we keep our CSRD disclosures accurate when the organisation is changing underneath us?

The good news: you don’t need to rebuild your report from scratch. If you align your sustainability boundary with your financial consolidation scope, document what changed, and keep a clean audit trail, your report can remain credible and assurance-ready—without enterprise-level overheads.

The golden rule: align your CSRD boundary with financial consolidation

Under CSRD, your sustainability boundary should mirror your financial reporting boundary. In practice:

• Acquisitions: include the acquired entity from the acquisition date (not retroactively for the full year).
• Disposals/carve-outs: exclude the divested entity from the disposal date onward.
• Comparatives: do not rewrite last year unless a restatement is necessary to understand trends; a clear note usually suffices.
• Groups: if you are a parent company, report on a consolidated basis; subsidiaries covered by the group report typically don’t need a separate one.

A short “basis of preparation” note explaining who joined/left and when is often all you need.

A simple M&A CSRD playbook for SMEs

1) Pre-deal: gather what you’ll need (light-touch)

• Ask for a data room pack: last 12–24 months of energy use, waste, water, workforce, H&S incidents, and any policies/certifications.
• Confirm site lists and addresses (for location disclosures).
• Identify systems and units (kWh vs MWh, FTE vs headcount) to plan conversions.

2) Day-1 to Day-30: set the reporting boundary and owners

• Confirm the effective dates (signing vs closing) and which months count.
• Assign a single owner for each metric (energy, workforce, waste, governance).
• Freeze a metric dictionary (unit, source, cadence) so everyone uses the same definitions.

3) Quarter-1: integrate data and controls (only what matters)

• Map legacy sources to your tracker; mark estimated or partial-year figures clearly.
• Document conversion methods (e.g., fuel litres → kWh; kg → tonnes).
• Install minimum controls: evidence file for each number, timestamp, and preparer/reviewer initials.

4) Before year-end: refresh materiality and targets (right-sized)

• Re-check double materiality: the new business might add material topics (e.g., refrigerants in hospitality, transport fuel in logistics).
• Re-baseline intensity metrics (e.g., tCO₂e/€ turnover) if the scale changed materially.
• If targets become unrealistic post-deal, revise them with rationale rather than ignoring slippage.

5) Year-end: disclose clearly, don’t over-engineer

Include three short notes up front:

1. Change in scope (who joined/left, dates).
2. Methodology updates (new systems, conversions, estimation).
3. Comparability (which metrics are not strictly comparable to prior year and why).

What to include in the report (and how to word it)

Basis of preparation (example)

“On 30 June 2025, we acquired GreenBite S.r.l. Data from GreenBite is included from 1 July 2025 to 31 December 2025. Prior-year figures have not been restated. Where full-period data was unavailable, we used pro-rata estimates based on invoiced consumption and production hours. Estimates are marked in the data register.”

Governance update (example)

“Following the acquisition, the COO is accountable for sustainability integration across new sites. Local site managers record monthly energy and waste data into the group tracker. A quarterly review by Finance and HSE validates outliers before management sign-off.”

Method changes (example)

“Legacy fuel data at the acquired sites was recorded in litres; we converted to kWh using standard factors and to tCO₂e using the latest national emission factors available at reporting.”

Special cases you’ll likely face

Carve-outs or discontinued operations

• Present performance excluding the carved-out unit from the disposal date.
• A “continuing operations” view can help stakeholders see underlying progress.

Mid-year platform roll-out (e.g., new utility vendor)

• If automated meter data starts mid-year, label pre-roll-out months as manual and post-roll-out as automated in your register. Consistency beats perfection.

Joint ventures and partial control

• Include operations you control; for non-controlled interests, disclose your share of impacts only where policy or materiality requires, and explain the approach.

Value chain (Scope 3) shifts

• If the deal meaningfully changes purchased goods, logistics or waste, update your Scope 3 screening, prioritising categories that grew most.

Minimal templates you can copy

Data register columns: Metric • Period • Unit • Value • Source doc/link • Site/entity • Est. (Y/N) • Method/Factor • Prepared by • Reviewed by • Date

Change-log columns: Date • Change (what/why) • Affected metrics • Impact (↑/↓/neutral) • Owner • Evidence

Responsibilities (RACI): Metric owners (prepare) • Finance/HSE (review) • Exec (approve) • IT (access) • Sites (inputs)

Assurance: make “limited” truly low-stress

Auditors look first for:

• Traceability: every number ties to a bill, system export, or calculation sheet.
• Consistency: same units, factors, and cut-off rules across entities.
• Sign-off: documented internal approval of the final tables and narrative.

If something isn’t available (e.g., a missing invoice), say so and explain how you estimated and how you’ll avoid a repeat next year.

Frequently Asked Questions

Do we need to restate last year after an acquisition?

Usually no. A clear comparability note is enough. Restate only if not doing so would seriously mislead readers. Focus on explaining the year-on-year change.

Our deal closed in October—do we include only three months of the target’s data?

Yes. Include the period from closing to year-end. You can add narrative context (e.g., annualised view) but keep official metrics aligned to your consolidation period.

Can a small group use the VSME Standard after M&A?

Yes. VSME suits non-listed SMEs and allows consolidated reporting. List included subsidiaries and state whether any disclosures were omitted because they were not applicable.

What should go into the Share Purchase Agreement (SPA) from a reporting angle?

Ask for post-closing data cooperation, access to historical utility and HR data, and alignment on estimation methods for partial periods. A short clause saves months of chasing later.

Key Terms

• CSRD: Corporate Sustainability Reporting Directive (EU 2022/2464)
• ESRS: European Sustainability Reporting Standards (detailed disclosure framework under CSRD)
• VSME: Voluntary Sustainability Reporting Standard for non-listed SMEs (EFRAG, 2024)
• Reporting Boundary: Which entities/operations are included, aligned to financial consolidation
• Limited Assurance: Initial level of external verification, focused on plausibility and evidence
• Double Materiality: Considering both financial effects on the company and impacts on people/environment

Conclusion: clarity over complexity

M&A doesn’t have to derail your CSRD progress. Align your boundary to finance, document changes plainly, keep a tidy evidence trail, and refresh material topics where the business has genuinely changed. That’s enough to stay compliant, pass assurance with confidence, and keep reporting useful for your team and stakeholders.