So, what’s next? The phrase on many lips this week on the back of the European Commission’s proposal to scale back reporting requirements (see our Omnibus FAQ for details) has left many in our community - and their bosses - questioning their next steps. For those who have invested countless hours and resources to prepare for the Corporate Sustainability Reporting Directive (CSRD), the rollback is a serious threat to hard-won sustainability budgets,buy-in and credibility, secured under the justification of regulatory compliance. In the coming weeks, as this news reaches C-level executives and board members, practitioners must be ready to navigate challenging conversations to defend their budgets.
However, this is not the time to step back. Now more than ever, it’s crucial to take proactive steps, refine your strategy based on your double materiality outcome, and prepare for meaningful discussions with leadership to ensure sustainability remains a priority.
Here, we outline three key scenarios you might find yourself in in and how to respond effectively (adapted from Solitaire Townsend excellent blog post):
1. Almost at the finish line? Don’t stop now!
If your organization has already invested heavily in CSRD compliance and is near completion of its first report, this is your moment to lead. Regardless of regulatory shifts, publishing your report sends a strong signal to stakeholders, including investors, employees, and customers, about your company’s transparency on key sustainability topics and its plans to address them.
What to do:
Proceed with publishing your CSRD-aligned report, even if reporting may now voluntary (need inspiration? Check out the first published reports here and our expert analysis of them here).
Highlight your report as a competitive differentiator, demonstrating transparency and accountability to key internal & external stakeholders.
If it hasn’t been done already, make sure that all your material topics are integrated into your sustainability and business strategies, and that responsibilities are assigned across the organization - you cannot bear all of them alone!
Swap notes & tactics with industry peers, responsible investors and regulators to shape the evolving sustainability landscape
2. In the middle of it and now potentially out of scope?! Leverage your Double Materiality Assessment for voluntary reporting & strategic validation
If your company has made progress on CSRD compliance but now may fall outside of its scope, you have a decision to make: continue reporting voluntarily and/or find ways to start addressing your material sustainability matters once the DMA is complete. Sustainability teams of 50.000+ companies are now facing this situation. Defending your CSRD budget and maintaining support from other teams won’t be easy - especially in organisations where action was only (reluctantly) taken under regulatory pressure.
One way forward is to reallocate resources to accelerate or launch some targeted sustainability initiatives based on your DMA results. Compliance or not, this is a valuable opportunity to use the DMA as a strategic tool to identify clear actions that can be seamlessly integrated into your organization’s sustainability and business roadmaps.
The good thing is that compliance is just one part of corporate sustainability - and one that, as an impact-driven non-profit, we have sometimes found painful to see absorbing so much time and money in the past.
What to do:
Finalise your (double) materiality assessment to determine your material impacts, risks and opportunities. Leverage the results to inform, validate & potentially broaden the scope of your sustainability strategy and start conversations about your material sustainability matters with your internal stakeholders - executive committee as a first priority. You can also present it to your external stakeholders,e. g. your investors or strategic suppliers, to demonstrate the effectiveness of your sustainability strategy.
Double-down on high-impact sustainability programs, such as decarbonization efforts or supplier engagement initiatives if climate change and responsible purchasing appeared as material in your DMA outcome.
Try to find your competitive edge behind this exercise, for instance, making sure that addressing the risks identified in your DMA today transform them into opportunities in the future.
Consider continuing to report on key sustainability metrics voluntarily, even in a streamlined format (e.g. starting from our Open Source VSME Reporting Tool) and then progressively absorb more data points to ultimately bring more transparency on your all material topics. This might not happen in 2026 (and under the strict ESRS requirements as originally planned) but it could bring value to your overall impact.
Join our upcoming course on Sustainability Leadership & Change Management to best prepare for difficult meetings with your leadership 😉
3. Early-Stage or reluctant compliance: Pivot to strategic sustainability
For companies that had only begun CSRD preparations, or saw compliance as a regulatory burden rather than an opportunity, the rollback offers a chance to rethink sustainability priorities. Instead of compliance-driven sustainability, organizations can now focus on embedding sustainability strategies that drive real value.
So, now might be the time to consider more impact-driven ways to spend your sustainability budget. Use the next weeks to put together a convincing plan and argumentation line on what you want to use your budget for:
What to do:
Shift focus from compliance to business-integrated sustainability strategies that enhance long-term resilience.
If you’re a small organisation, start to seriously explore the inescapable sustainability matters - such as climate change, own workforce or business conduct - or any topics or subtopics particularly relevant to your industry. If you don’t know where to start, have a look at scientific reports talking about your industry or industry, sustainability reports from your peers or sustainability benchmarks.
Look to the VSME framework developed by EU institutions to see if it is more complete than what you already report on for your investors. Make sure to build a strong dialogue with internal teams to strengthen reporting processes and bring more quality and accuracy to the data you want to share with your key sustainability stakeholders in the future.
Identify quick-win sustainability initiatives that align with core business objectives and can drive measurable impact, be it Energy Efficiency & Carbon Reduction, Sustainable Supply Chain or Product Innovation. And make sure to include that LFCA membership in your proposal! 😌
Strengthen stakeholder engagement to ensure that voluntary actions align with investor, business partners and customer expectations.
Our course on Strategic Sustainability Roadmapping is a great place to start!
Get ready for difficult discussions
For sustainability practitioners, fighting for budget and buy-in is nothing new. Learning how to effectively lead change (because that’s what sustainability is all about!), is a skill that will become more crucial than ever in the coming months of uncertainty.
As regulatory pressure weakens, organizations will seek to deprioritise sustainability unless it is seamlessly integrated with business goals. If you can’t bridge that gap, there’s a lot at stake: shrinking budgets, missed targets, sidelined initiatives, and—most critically—diminishing credibility and influence. Without strong leadership and change management skills, even the best sustainability strategies fail to take root.
But, those who master this skill set unlock a different reality: they gain a voice in leadership circles, secure buy-in from key stakeholders, and create momentum that leads to real, measurable impact. They help their organizations stay competitive and drive meaningful, lasting change.
This is why we’ve built a comprehensive framework—complete with templates, tools, and a step-by-step course—to equip you with exactly what you need to navigate these challenges and turn sustainability from an uphill battle into a strategic advantage. Want to learn more? Email timo@lfca.earth to schedule a quick call.