Sustainability reporting: An overview of the most important standards

In Europe, the manufacturing sector contributes a significant 22% of total greenhouse gas emissions. Industrial companies must therefore navigate their way through a maze of laws and standards in order to establish and improve suitable methods for carbon accounting.

Sustainability reporting plays a central role in this, as it creates transparency and enables companies to measure and communicate their environmental impact.

Frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and the drafts of the International Sustainability Standards Board (ISSB) have significantly developed the landscape of sustainability reporting, improving the quality and consistency of reports. Nevertheless, choosing the right standard remains a challenge, as other guidelines exist alongside the CSRD and ISSB, and this article provides a summary of the most important standards.

Corporate Sustainability Reporting Directive (CSRD)

• Mandatory for many European companies, detailed reporting.
• The Corporate Sustainability Reporting Directive (CSRD) entered into force in January 2023 and expands on the previous Non-Financial Reporting Directive (NFRD). Following the EU Omnibus Directive, which took effect in March 2026, the thresholds were significantly raised: companies are now required to report if they have more than 1,000 employees and over €450 million in revenue — reducing the number of affected companies from an originally estimated 50,000 to around 5,000. The CSRD requires relevant, comparable, and reliable information on sustainability impacts as well as related risks and opportunities. Implementation is carried out through the European Sustainability Reporting Standards (ESRS), developed by the European Financial Reporting Advisory Group (EFRAG).

Voluntary Sustainability Reporting Standard for SMEs (VSME)

• Voluntary, simplified standard for small and medium-sized enterprises
• The VSME was developed by EFRAG and offers a streamlined, voluntary way for non-listed SMEs, as well as companies no longer subject to CSRD reporting, to report on sustainability, for example, to banks, investors, or business partners requesting such data along the supply chain.

International Sustainability Standards Board (ISSB)

• Global harmonization, complementary to IFRS
• Founded in 2021, the ISSB aims to develop global standards for the disclosure of sustainability information and to expand IFRS (International Financial Reporting Standards) to include non-financial disclosures. It works closely with the Global Reporting Initiative (GRI) and EFRAG. In 2023, the ISSB published two standards: IFRS S1 for general requirements and IFRS S2 for climate-related disclosures.

Global Reporting Initiative (GRI)

• Internationally established, high effort
• The GRI Standards enable organizations to report on the most significant impacts of their activities on the economy, environment and people, including human rights. Over 13,000 organizations in 90 countries use GRI for their sustainability reporting.

Deutscher Nachhaltigkeitskodex (DNK)

• Germany-wide and across all industries
• The German Sustainability Code (GSC) is a cross-industry transparency standard for reporting corporate sustainability performance and is available to companies of all sizes. Since 2017, the DNK has integrated the requirements of the NFRD.

Task Force on Climate-related Financial Disclosures (TCFD)

• Climate-related financial information for financial markets
• The TCFD, which was introduced in 2015, aims to create transparency with regard to the climate-related business activities of companies. It provides the financial markets with climate-related financial information to support well-founded capital allocation decisions.

Carbon Disclosure Project (CDP)

• Used globally, evaluates environmental responsibility
• The CDP is a global non-profit organization that offers companies, investors, regions, states, cities and authorities a platform for disclosing their environmental impact. Based on the data submitted, the CDP assesses the environmental responsibility of companies.

Greenhouse Gas Protokoll (GHG-Protokoll)

• The gold standard for carbon accounting
• The Greenhouse Gas Protocol is an internationally recognized standard for recording and reporting greenhouse gas emissions. It offers companies a comprehensive approach to quantifying and managing their emissions, divided into the categories Scope 1-3.

Non-Financial Reporting Directive (NFRD)

• Predecessor to the CSRD
• The NFRD, introduced in the EU in 2014, requires companies to publish a report on their ESG performance in addition to their annual management report. Its aim is to assess the non-financial performance of large companies and promote a responsible business approach. The Corporate Sustainability Reporting Directive (CSRD) replaces the previous Non-Financial Reporting Directive (NFRD). The first reporting wave is already subject to reporting obligations; the second wave, following the delay introduced by the Omnibus procedure, applies from financial year 2027.

Securities and Exchange Commission Rule (US SEC Rule)

• Mandatory standardized climate reporting for listed companies in the USA

• The Climate-Related Disclosure Rule, adopted by the U.S. Securities and Exchange Commission (SEC) in 2024, was intended to require publicly listed companies to provide standardized climate disclosures in annual reports and registration statements. However, it was never fully implemented: following numerous lawsuits, the SEC initially paused the rule and, in June 2026, proposed its complete rescission (comment period open until August 3, 2026). As a result, publicly listed U.S. companies remain subject to the existing, principles-based disclosure requirements rather than a specific climate reporting mandate.

Reporting standards and their relationships to each other