How to Simplify Overcomplicated CSRD Reporting

Corporate Sustainability Reporting under the EU’s CSRD Directive is often seen as too complex, too expensive, and too tailored to large corporations. For small and growing businesses (SMEs), this perception can be paralysing—especially when most guidance and tools seem built for multinationals.

The good news is that CSRD reporting can be simplified without cutting corners. By focusing on proportionate standards, digital tools, and lean data practices, SMEs can meet expectations confidently and cost-effectively. This guide explains how to streamline your reporting process and avoid “big company” overkill.

Why CSRD Reporting Feels Overwhelming

The CSRD Directive (2022/2464/EU) extends sustainability reporting to thousands of companies that were never covered before. It demands disclosures on environmental, social and governance (ESG) matters—but its detailed European Sustainability Reporting Standards (ESRS) can intimidate smaller firms.

Many SMEs struggle because:

• Reporting templates are designed for large, listed companies
• Consultants push enterprise-level solutions
• Data collection systems are manual and fragmented
• Requirements appear endless or unclear

Yet the Voluntary Standard for SMEs (VSME), developed by EFRAG in 2024, exists precisely to solve these issues. It provides a simplified, modular approach designed around SMEs’ resources and real-world constraints.

Step 1: Use the VSME Standard, Not Full ESRS

Instead of wrestling with hundreds of ESRS disclosure points, the VSME Standard offers two streamlined modules:

• Basic Module: A core set of 11 disclosures covering energy, workforce, waste, and governance
• Comprehensive Module: Optional metrics for SMEs working closely with large corporate clients or financial institutions

The Basic Module alone is sufficient for most non-listed SMEs. It’s proportionate, voluntary, and aligned with CSRD principles—making it the ideal foundation for early compliance without consultant dependency.

Step 2: Focus on Material Topics Only

CSRD’s concept of “double materiality” can sound academic, but it simply means focusing on:

1. What significantly impacts your business financially, and
2. What your business significantly impacts environmentally or socially.

You don’t need to report on every possible topic—only those relevant to your operations. For example:

• A small logistics firm: fuel use, driver safety, emissions
• A retail chain: waste, energy efficiency, fair labour
• A software company: employee well-being, data protection

Start with 4–6 key topics and expand only if stakeholders (like banks or customers) request more data.

Step 3: Automate Data Collection Early

Spreadsheets work for your first CSRD cycle, but automation quickly pays off. Digital tools help:

• Pull energy, waste, and HR data from existing systems
• Track annual progress automatically
• Generate VSME or ESRS-aligned reports

Most SMEs save 8–12 hours per month by using software instead of manual spreadsheets. Look for tools that support VSME templates, export ESRS metrics, and integrate with your accounting or HR systems.

Step 4: Keep Reporting Annual, Not Continuous

CSRD requires annual reporting, not monthly tracking. SMEs often overcomplicate things by collecting too frequently or duplicating efforts. Once per year—aligned with your financial statement period—is enough.

The VSME Standard even allows you to state when “no change” occurred since the previous year, avoiding unnecessary work.

Step 5: Start with a Pilot Year

Treat your first reporting cycle as a pilot year. Focus on:

• Getting reliable baseline data (e.g., total energy and headcount)
• Understanding what’s material to your business
• Testing your reporting workflow

No penalties exist for honest learning. The goal is clarity and improvement over time, not perfection from day one.

Frequently Asked Questions

Do small companies actually need to report under CSRD?

Most small and medium-sized businesses are not directly required to report under CSRD unless they are listed or part of a large group. However, many still need to provide sustainability data to larger customers or banks. The VSME Standard helps SMEs prepare this information in a recognised format.

What’s the easiest way to collect CSRD data?

Start with your existing records—utility bills, payroll data, and supplier invoices. These already contain much of what you need. Software tools that automate energy and workforce tracking can cut reporting time dramatically, especially for recurring metrics.

Can I meet CSRD expectations without consultants?

Yes. Both CSRD and VSME are designed to be self-managed by SMEs. You may only need expert help for specific topics (like emissions calculation). Most small firms can use ready-made templates and digital tools instead of hiring external consultants.

How long does it take to complete a VSME report?

For a first-time SME, expect around 20–30 hours of setup (mostly data gathering). In following years, automated tools or templates can reduce this to 5–8 hours annually—well within reach for a small team.

Key Terms

• CSRD: Corporate Sustainability Reporting Directive (EU 2022/2464)
• VSME: Voluntary Sustainability Reporting Standard for non-listed SMEs by EFRAG (2024)
• ESRS: European Sustainability Reporting Standards
• Double Materiality: Considering both financial and impact materiality
• EFRAG: European Financial Reporting Advisory Group

Conclusion: Keep It Simple, Keep It Consistent

Simplifying CSRD reporting is about using the right framework, not doing less. By applying the VSME Standard, focusing on material topics, and using affordable software, small and growing businesses can deliver credible, compliant sustainability reports—without big-company complexity.

The key is consistency over perfection: start small, automate early, and build a clear annual rhythm that grows with your business.