In the last 18 months or so, the sustainability reporting landscape has shifted significantly. For NI businesses trading across the UK and the EU, now is a good time to reassess what applies and what is coming next. While many have spent the last two years preparing for the EU Corporate Sustainability Reporting Directive (CSRD), a series of regulatory changes since 2025 have simplified or removed compliance requirements for all but the largest. That said, the importance of sustainability data within supply chains has increased, so here’s what you need to know.

Sustainability Reporting Update: What you need to know

1. CSRD: Simpler, smaller scope

The EU’s sustainability “Omnibus” reforms have substantially reduced the number of companies directly required to report under CSRD. Reporting is now focused on larger organisations, with the EU estimating that around 80% of companies previously expected to fall within scope may now be exempt.

In addition, the EU’s “Stop-the-Clock” Directive delayed reporting requirements for many companies by two years, providing more time for implementation and reducing immediate compliance pressures.

What this means for NI businesses:

Many mid-sized businesses that were preparing for CSRD may no longer be directly in scope.

However, larger customers, contractors and investors will still require sustainability information from suppliers, so efforts and time spent on preparation won’t go to waste. ESG data requests are unlikely to disappear from supply chains any time soon. In fact we’re seeing that more of these requests are coming through, shifting the pressure from regulatory to commercial.

2. ESRS has been simplified

A major recent development was the European Commission’s adoption of revised European Sustainability Reporting Standards (ESRS) in July 2026. The revised standards reduce mandatory reporting datapoints by more than 60% and overall disclosures by more than 70%, while maintaining the core principles of sustainability reporting.

The Commission has also introduced a voluntary sustainability reporting standard (VSME) for smaller companies outside CSRD scope. This creates a common framework for SMEs and limits the amount of information larger organisations can request from suppliers in their value chains.

For construction and manufacturing businesses, the focus remains on addressing and monitoring:

• Carbon emissions and energy use
• Waste reduction and resource efficiency
• Circular economy initiatives
• Workforce health, safety and wellbeing
• Governance and risk management

So, businesses that have already gathered their data will be well positioned, regardless of future regulatory changes.

3. Ireland Update

Ireland has now transposed the EU “Stop-the-Clock” Directive into national law, delaying sustainability reporting requirements for many entities and providing greater clarity on which companies fall within scope. This is particularly relevant for Northern Ireland businesses with operations, customers or supply chain operations in the Republic of Ireland.

4. UK Developments

While the UK is not implementing CSRD, sustainability reporting continues to evolve.

The UK Government published its final UK Sustainability Reporting Standards (UK SRS S1 and S2) in February this year. Based on the global ISSB framework, these standards are currently voluntary, but are expected to form the basis of future reporting requirements for certain UK companies.

The UK Government is also considering requirements for climate transition plans for large companies and financial institutions, while the FCA is consulting on how UK SRS should be embedded within listed company reporting requirements.

So, although most SMEs won’t face mandatory reporting in the near term, larger customers are increasingly embedding sustainability requirements into procurement and tender processes, shifting the pressure from regulatory to commercial.

Looking Ahead: What should you be looking out for?

Keep an eye on:

• Implementation of the revised ESRS standards across Europe
• Adoption of UK SRS within future UK reporting requirements
• Potential UK transition plan requirements
• Growing customer and procurement requests for sustainability information
• Increased focus on carbon reduction, circularity and responsible sourcing across supply chains

Practical advice:

Don’t assume sustainability reporting is going away. While regulatory requirements have been simplified for many businesses, the demand for reliable sustainability data continues to grow. For construction and manufacturing companies, the ability to provide credible information on carbon emissions, energy use, waste, circularity and workforce performance is increasingly becoming a commercial requirement. Doing so will help companies remain competitive in tenders, supply chains and customer relationships. We’re regularly seeing companies win or lose work on the basis of the sustainability management systems they have in place.