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The Scope of the UK SRS and CP26/5 Requirements

The UK SRS Timeline and What Happens Next

Does ESG reporting still apply to you?

According to current proposals:

• CSRD would apply to companies with more than 1,000 employees and over EUR 450 million in net turnover.
• CSDDD would apply to companies with more than 5,000 employees and turnover above EUR 1.5 billion.

For companies below these thresholds, this would mean one thing: the formal obligation to report may no longer apply. But this does not mean ESG stops being relevant—quite the opposite.

ESG reporting not only helps you meet market expectations but, above all, allows you to identify risks that may translate into real financial losses—from supply chain disruptions and increasing energy costs to the potential loss of contracts.

Why voluntary ESG reporting is worth the effort

1. Maintaining your position in the supply chain

According to the report Decarbonisation Is Already Here, prepared by the Climate & Strategy Foundation, 72% of SMEs using their calculator state that clients ask them about their carbon footprint—19% receive such questions regularly.

If your company supplies goods or services to larger entities, it is worth being prepared for these inquiries. A lack of data may lead to losing a contract to a competitor who has those figures ready.

2. Risk assessment by financial institutions

Banks and investment funds still need to report ESG under their own regulations, and nothing indicates this will change soon. They rely heavily on data provided by their clients to meet these obligations. This means the absence of ESG policies may negatively affect the risk assessment of companies applying for financing.

Example: A construction company with no adaptation plan for extreme weather events may be considered high-risk and receive worse loan terms—or be denied financing altogether.

3. Insurance and climate-related risks

Climate change affects not only energy costs and resource availability but also insurance pricing. Insurers increasingly require ESG data to assess operational risk. For example, a logistics company without a climate risk analysis may be unable to secure coverage for a warehouse in a flood-prone region. In 2022, Poland’s largest energy companies spent PLN 31 billion on emissions allowances alone—nine times more than four years earlier.

4. Early identification of financial risks

A properly conducted analysis of carbon footprint, resource consumption, and ecosystem impact helps identify risks before they become costly. For instance, identifying the risk of rising electricity prices and investing in your own renewable energy source can protect your operating costs in years to come.

5. ESG as a competitive advantage

Companies that report ESG manage costs more effectively, attract investors, and build business resilience. In municipal tenders, requirements such as fleet electrification increasingly influence contractor selection.

Research results presented in the Ayming International ESG Barometer 2025 clearly show that businesses are developing a deeper understanding of ESG. When asked about progress in implementing selected ESG solutions, 35% of companies indicated they have already implemented e-mobility (e.g., EV infrastructure), and another 48% plan to do so. This means that staying competitive requires keeping pace with the sustainability initiatives your competitors are already implementing.

What can you do right now?

If your company falls below the new thresholds, you can decide how to proceed—but taking a thoughtful, strategic approach will help you make the most of this flexibility:

1. Check whether you’re part of a larger company’s supply chain

If your clients fall under CSRD, expect inquiries about their emissions, environmental policies, and broader ESG risks. Even without formal reporting, it is beneficial to implement basic due diligence procedures.

2. Use the VSME standard

The European Commission plans to launch a free portal providing guidance and reporting templates for small and medium-sized businesses. It offers a straightforward, accessible starting point that aligns with current market expectations.

3. Build ESG competencies in your team

Even a basic report relies on accurate data, clear processes, and team engagement. Starting early makes it easier to build toward more advanced practices over time. Begin with straightforward assessments—such as energy consumption, Scope 1 and 2 GHG emissions, or diversity policies.

4. Consider developing a climate transition plan

While it is not mandatory, preparing one can be highly beneficial. Companies that develop such plans are better equipped to navigate rising energy prices, evolving regulations, and increasing client expectations. In 2023, 54% of companies published a transition plan, and 40% set a net-zero target..

5. Monitor legislative developments

The Omnibus proposal has not been adopted, and another vote is scheduled for November. Keeping track of these developments will help you stay prepared.

Summary: Don’t wait—act!

Changes in CSRD and CSDDD are not merely deregulation—they signal that the EU is seeking balance between climate ambitions and business realities. For companies under 1,000 employees, this is the moment to make a conscious decision.

ESG is here to stay. As its form, scope, and pace evolve, companies that embrace it now will not only secure regulatory clarity but also position themselves for meaningful, lasting market advantage.

If you want to discuss how to approach ESG in your company—we’re here to help. We support companies under 1,000 employees in implementing ESG practices, building resilience, and preparing for the future.

What should you know about EPR as a seller, distributor, or manufacturer?

EPR places environmental responsibility on companies for the entire lifecycle of their products. Whether you’re a manufacturer or simply a seller, you must comply with specific obligations. Failure to do so can result in fines, blocked listings, or even a complete ban on selling in Germany. Below you’ll find all the essential information to help you stay compliant.

Extended Producer Responsibility (Erweiterte Herstellerverantwortung – EHV) is a legal framework that requires companies to manage their products after their end-of-life. It applies to several product categories: packaging, batteries, electrical and electronic equipment (EEE)

Under the “polluter pays” principle, if you profit from selling regulated products, you are also responsible for their environmental impact. This includes recycling, disposal, and financial contributions to waste management systems.

Who must comply?

1. Manufacturers and brand owners
   • Produce goods and sell under their own brand
   • Outsource production but sell under their own brand (private label)
2. Exporters and cross-border sellers
   • Sell directly to German consumers via e-commerce
   • Operate online shops or sales platforms with delivery to Germany
3. Retailers and mail-order companies operating in Germany
   • Sell online or via mail order within Germany
   • Deliver products directly to end customers
4. Importers and distributors
   • Import goods into Germany
   • Resell them (wholesale or retail)

If your business sells physical goods in Germany and those products generate waste such as packaging, electronic devices or batteries, you are likely subject to EPR regulations. These rules apply regardless of where your company is bases.

How to comply with EPR in Germany: Step-by-step guide

New plastic tax – what you should know

From 1 January 2024, Germany introduced an environmental levy on single-use plastic products. This includes takeaway food containers, plastic cups, bags, and wet wipes.

Obligations for producers and importers:

• Register in the DIVID system
• Track quantities sold from 2024
• Submit annual reports
• Pay the calculated levy

Funds collected are used to reimburse municipalities for waste management and environmental protection, reinforcing Germany’s commitment to sustainability.

What are the risks of non-compliance?

Ignoring EPR obligations can lead to serious consequences:

• Fines – substantial financial penalties
• Blocked listings – marketplaces may suspend your products
• Sales bans – in extreme cases, complete exclusion from the German market

Beyond legal risks, non-compliance can damage trust with customers and business partners.

Not sure if EPR applies to your business?We’re here to help.

Navigating EPR requirements can be complex—especially for companies entering the German market. At EFF, we specialize in supporting businesses at every stage. From registration with LUCID and Stiftung EAR to appointing a local representative and ongoing reporting—we provide full support to help you stay compliant.

Act now – Avoid costs. Gain advantage. Be responsible.

Environmental regulations like EPR are here to stay and are becoming stricter. Governments and consumers expect greater accountability. Acting now helps you avoid financial and operational risks and positions your brand as a sustainability leader.

Source:

– Zentrale Stelle Verpackungsregister (ZSVR). (n.d.). Verpackungsregister [Website].https://www.verpackungsregister.org/
– Stiftung elektro‑altgeräte register (stiftung ear). (n.d.). stiftung ear – Your authority for implementing ElektroG & BattG [Website]. https://www.stiftung-ear.de/en/

Slowing down climate action – Short-term gain, long-term loss

Although the proposal to reduce the number of companies required to report on ESG has its advantages and may be attractive to businesses seeking to avoid additional administrative costs, these short-term savings will not offset long-term consequences. Without transparent reporting, companies will find it easier to limit investments in green technologies and climate adaptation. This means:

• Fewer companies will monitor their greenhouse gas emissions and energy efficiency.
• Decarbonisation initiatives in production and supply chains will be scaled back.
• Businesses will be less inclined to implement adaptation strategies, such as protection against extreme weather events.

It is therefore crucial to emphasise the objective of the Omnibus. Simplifying reporting requirements is not intended to weaken climate strategies. On the contrary – by freeing up company resources from complex reporting processes, the goal is to give them space to implement actions as quickly as possible. In short: more action, less bureaucracy – a step towards real results.

Companies must remember that without adequate mitigation measures, climate change will accelerate, and its effects will cut across multiple areas.

Here are a few examples of real consequences:

• Extreme weather events will damage infrastructure – Severe storms, floods, and heatwaves will become more frequent and intense. Without proper preparation and adaptation, companies exposed to these threats will face enormous financial losses. An example is the 2021 floods in Germany, which cost the economy over EUR 30 billion.
• Disruptions in raw material supplies and supply chains – Droughts and other weather anomalies will adversely affect agriculture, among other sectors, leading to higher food and raw material prices. Companies unprepared for such circumstances will face serious operational challenges.
• Higher insurance premiums and financial losses – Insurers are already raising premiums for companies in areas threatened by climate change. As the problem escalates, companies will be forced to pay more, impacting their profitability.
• Loss of investor and consumer trust – Investors increasingly factor ESG into financial decisions. Companies that scale back reporting and climate action risk losing access to financing and facing capital outflows.

Why is ESG transparency crucial?

Responsible ESG reporting is not merely a bureaucratic requirement – it is a mechanism that drives companies to take real climate action. Transparency enables progress evaluation and increases pressure on businesses to implement sustainable strategies on a broad scale.

If the limitation of ESG reporting obligations results in halting activities in these areas, it will be a step backwards in the fight against climate change. The growing climate risk and its consequences will cost global economies billions of dollars annually. If companies fail to act now, in a few years they will face even greater losses – both financial and environmental. Climate change does not wait for reports – it spreads regardless of political decisions. Businesses that ignore responsibility for their actions today will face unavoidable costs tomorrow.

Sources:

– Powódź w Niemczech. 30 mld euro na fundusz odbudowy [Floods in Germany: EUR 30 billion reconstruction fund]

Reporting to CDP – what, why, and how

What is CDP?

CDP (Carbon Disclosure Project) is an organization that promotes transparency in corporate activities related to climate, water, and land use. Each year, it invites companies to complete a questionnaire that helps assess their environmental impact and how they manage climate-related risks.

CDP is not only an ESG tool – it is also a valuable source of data for investors and analysts who rely on reporting outcomes when making financial decisions.

Why do companies report to CDP?

An increasing number of organizations choose to participate in CDP, even if not formally required to do so. Why? Because reporting to CDP brings tangible benefits:

• You enhance credibility – showing that you take ESG seriously and act transparently.
• You gain easier access to financing – CDP data can serve as leverage in negotiating terms, e.g., for loans.
• You understand climate risks – supporting long-term business resilience.

How does the process work?

The reporting process is cyclical. The questionnaire is published in spring, with submission deadlines falling in summer. Questions cover, among others, climate strategy, CO2 emissions (Scope 1, 2, and 3), reduction targets, risk management, and supplier engagement.

Scores are awarded on a scale from D to A. A higher rating means not only prestige but also greater stakeholder trust.

Challenges and difficulties

For many companies, reporting to CDP poses a significant challenge, particularly the first time. The main obstacles include lack of data – especially Scope 3 emissions (from suppliers), lack of time to collect and compile information requiring cross-departmental collaboration, and limited knowledge. The questionnaires are highly technical, demanding both knowledge of ESG terminology and an understanding of a complex scoring methodology. Additionally, many organizations lack dedicated teams or specialists responsible for environmental reporting.

Advisory support in CDP reporting – how we can help your company

An advisor can provide invaluable support, particularly if your company is reporting to CDP for the first time or lacks internal resources. External assistance is also essential when aiming to improve your score or align your CDP report with other ESG documents.

Working with our advisors allows your company to benefit from:

• Pre-reporting evaluation – assessing whether your company is prepared for reporting.
• Questionnaire completion – we help interpret CDP questions and develop response strategies.
• Data collection – we know where and how to obtain the necessary information.
• Score improvement – our expertise helps you achieve a stronger final rating.

CDP as part of a broader ESG strategy

A CDP report is not the only reporting tool – it should complement other sustainability activities, such as Ecovadis, CSRD, or TCFD reports. A comprehensive approach is key – a well-structured reporting process allows the same data to be leveraged across multiple documents, e.g., in communication with investors and clients.

With a consistent approach, you:

• streamline processes,
• create a consistent narrative,
• stay ready for changing regulations and rising market expectations.

Step by step towards effective reporting

Whether your company has already been invited to CDP or is planning to join, early preparation is key.

The key steps include:

• Assembling a team responsible for ESG and environmental data.
• Reviewing available data and past reports.
• Establishing a timeline and milestones.
• Contacting an advisor to carry out a pre-reporting evaluation.

What is EcoVadis and why is it gaining traction?

EcoVadis is a global platform that evaluates companies across four areas: environment, human rights and labor, ethics, and sustainable procurement. Rated companies receive points (0–100) and a medal – ranging from bronze to platinum – based on the evidence they provide.

A good rating is not just a pat on the back – increasingly, it determines whether a company can collaborate, compete in tenders, or sign a contract with an international client.

When and for whom is EcoVadis certification valuable?

EcoVadis certification is particularly important for companies operating within the supply chains of large corporations – including manufacturers, distributors, service providers, and logistics partners. It also brings added value to organizations bidding for contracts that include ESG requirements, seeking to strengthen their responsible brand image, preparing for CSRD-aligned reporting, or planning expansion into new markets.

The assessment process – step by step

1. Registration on the platform and payment of the license.
2. Collection and/or preparation of data to complete the questionnaire.
3. Filling in the questionnaire tailored to the company’s industry and size.
4. Attaching supporting documents (e.g. policies and procedures).
5. Review and analysis of the questionnaire by EcoVadis experts.
6. Receiving the report with the score and potential medal.
7. Sharing the result with business partners.

The rating is valid for 12 months. It can be updated and improved, allowing companies to monitor progress and strengthen ESG initiatives.

EcoVadis as part of an ESG strategy

For many companies, EcoVadis is more than just a client requirement – it is a development tool and a key component of their ESG strategy. By integrating it with GRI, CSRD, or other systems (e.g. CDP), organizations:

• collect data once and use it multiple times,
• improve communication with clients and investors,
• are better prepared for regulatory and market changes.

The rating can also serve as a starting point for internal audits, environmental implementations, and the development of an ESG strategy. The main challenges include gaps in documentation, lack of knowledge, and limited understanding of the methodology. Frequently, companies also lack a designated person responsible for ESG issues.

How do we help companies achieve a high score?

A high score in EcoVadis brings tangible business benefits. It strengthens customer and partner trust, supports contract acquisition, and provides a competitive edge. That is why it is worth working with a consultant who will guide you smoothly through the assessment process – particularly during the first reporting attempt.

We support companies at every stage:

• Conducting a readiness audit.
• Assisting in completing the questionnaire in line with the criteria.
• Supporting the collection and preparation of documentation.
• Advising on actions to implement to increase the chance of achieving a medal.

Gain an advantage with EcoVadis

EcoVadis has already assessed over 150,000 companies worldwide, helping them manage risks and improve ESG performance. In 2024, the average company score was 53.4 points, with only 6–28% of organizations reaching the “Advanced” or “Outstanding” levels. Your company can become one of them.

What is the SUP Directive?

The SUP (Single-Use Plastics) Directive is a regulation aimed at reducing the production and use of single-use plastic products. In practice, this means that EU member states have introduced a range of measures restricting the production, distribution, and recycling of such items.

What changes did the SUP Directive introduce?

Implementation of the SUP Directive has varied across Europe, with each country tailoring its approach to local needs. In Poland, since 2021, manufacturers are required to mark plastic packaging with the “dead turtle” pictogram—a stark reminder intended to raise consumer awareness of plastic pollution. The country has also banned the sale of selected single-use products, including plastic cutlery, plates, and straws.

Similar measures have been taken in other EU states. Spain and France have banned plastic cutlery and the use of expanded polystyrene packaging. Germany went a step further by introducing mandatory charges for plastic bags, which significantly reduced their consumption. These countries have also adopted stringent recycling regulations to ensure that as much plastic as possible is reused rather than being disposed of in landfills.

A challenge for business, an opportunity for the environment

For businesses, the SUP Directive has brought numerous challenges. Companies have had to invest in new technologies, revise production processes, and adapt to new legal requirements. Examples include replacing plastic bags with paper alternatives in grocery stores and switching to biodegradable packaging for various products.

On the other hand, the directive has opened new avenues. Eco-packaging manufacturers have seen a surge in demand, with innovations such as single-use tableware made from wheat bran gaining traction.

Shaping new consumer habits

The SUP Directive has also prompted a shift in end user behavior. An increasing number of consumers are opting for reusable products, such as stainless steel water bottles or eco-friendly shopping bags. This shift has been driven not only by regulatory demands but also by educational campaigns highlighting the environmental impact of our daily choices.

Looking ahead: A circular economy

The ultimate goal of the SUP Directive is not only to reduce plastic use, but also to foster a circular economy. This model emphasizes designing products for durability, reusability, and recyclability. The road ahead may still be long, but the early efforts reflect a clear and committed direction.

The SUP Directive is proof that sustainable development is more than a buzzword—it is a tangible direction in which the modern world is heading. The question we must now ask ourselves is: what more can we do to further reduce our impact on the planet?

The pillars of sustainability

To fully grasp the meaning of sustainability, it is crucial to understand its three core pillars:

• Environmental – focused on environmental protection, combating climate change, safeguarding air and water quality, and preserving biodiversity.
• Social – includes initiatives promoting social equality, health, education, and improved quality of life.
• Economic – aims for economic growth that does not compromise environment, but instead manages and resonsibly utilises its potential.

For sustainability to a lasting impact, these these three elements must work in harmony.

Sustainability in practice

The idea of sustainability translates into tangible actions across various sectors of life and the economy. Some examples include:

• In agriculture – promoting organic farming and responsible use of natural resources.
• In construction – designing energy-efficient, low-emission buildings.
• In manufacturing – reducing waste and improving production management.

The goals of sustainability are supported by different groups — consumers, companies, and public institutions:

• Consumers, by making responsible purchasing decisions, support producers that adhere to sustainable practices.
• Businesses, by implementing sustainability strategies based on the three pillars.
• Governments, by introducing legislation that supports both ecology and the economy, investing in education, environmental regulation, and new technologies.

A sustainability strategy in business

A growing number of companies now understand how to implement sustainability strategies to meet customer and market expectations. Notably, what was once considered merely a passing trend, has become a recongised and actionable business strategy.

A well-designed sustainability strategy delivers measurable benefits:

• reduced resource consumption,
• lower costs,
• enhanced brand image,
• increased customer and partner trust.

Sustainability in business is becoming more than just a marketing tool. It is an approach that genuinely influences how companies operate and interact with their environment. Its relevance is growing each year, as environmental and social responsibility becomes the foundation of long-term success.

What are the benefits of sustainability?

The benefits of sustainability can be noticed across multiple levels — for both the planet and its people. The key advantages include:

• reduced use of natural resources,
• lower CO₂ and pollutant emissions,
• clean air and water accessible for present and future generations,
• protection of biodiversity and ecosystems,
• improved quality of life and health,
• development of green technologies and innovation.

By implementing sustainability, we can align economic progress with ecological preservation, building a more resilient and stable socio-economic system.

Conclusion

Sustainability is more than just a buzzword — it’s a practical response to modern-day challenges. Understanding what it is, what it involves, as well as its goals, pillars, and benefits allows us to better appreciate its importance and make conscious choices — as consumers, entrepreneurs, and citizens.

Collective efforts to protect the environment, ensure social justice, and strike a balance between ecology and the economy are key to a better future — for ourselves and generations to come.

Greenwashing mistakes

Earlier this year, the European Parliament approved a general approach for the proposal of a Green Claims Directive. If approved, this legislation would oblige companies to provide evidence for any environmental claims made prior to selling their products. 

To avoid the reputational (and perhaps soon, regulatory) risks of greenwashing, companies can start by avoiding what are known as the “7 sins of greenwashing”: 

1. Hidden trade-offs: Claims need to consider the entire lifecycle when making claims about benefits. 
   For example, paper from sustainably harvested forests is not necessarily environmentally beneficial because other parts of the paper-making process have environmental impacts (e.g., chlorine in bleaching or greenhouse gas emissions in production) that are equally important.  
2. No proof: Claims need to have accessible supporting information (either internally or a third-party).   
   For example, often facial tissues or other hygiene products will claim some percentage of recycled content without providing any evidence.  
3. Vagueness: Claims should be specific and accurate to avoid misunderstanding by the consumer.  
   For example, many chemicals and substances that are “natural” are still harmful (e.g., arsenic, uranium, or mercury).  
4. Worshipping false labels: Claims cannot give the impression (either verbally or visually) that a third-party has endorsed the product or brand where this endorsement does not exist. 
   For example, putting an EU Eco-label on a product where you have not been verified by that organisation.  
5. Irrelevance: Claims must be true but also must be important and pertinent.  
   For example, claiming that something is “CFC-free” is not very useful for consumers in modern day because CFCs (chlorofluorocarbons) have been banned for most uses since the Montreal Protocol.  
6. Lesser of two evils: Claims of comparisons might be true within the product category but still ignore (and distract the consumer from) the harmful impacts of the product category as a whole.  
   For example, organic cigarettes are preferrable to non-organic but are still harmful to the body and dangerous to human health.  
7. Lying: Claims must be true.  For example, companies cannot claim to be ENERGY STAR, FSC, or any other certifications that it does not have.  

Greenwashing examples

While the specific terms used might differ from company to company, here are a few general examples of terms to avoid: 

For generic terms like this, it’s best to explain why or how it’s eco-friendly etc. For example, do you use renewable energy in production? Discuss that. Does the fabric only consist of natural fibres? Mention that. 

It also helps to have a third-party verification. For example, the FSC standard for paper production, where applicable, might use terms like “responsibly sourced” with clear evidence provided by the certification. 

In short: specificity and substantiation are key. 

Sources:
– European Parliament Think Tank “’Green Claims’ Directive: Protecting Consumers from Greenwashing” (2024) 
– CPS Bureau Veritas “EU Green Claims Directive: What You Need to Know” (2024) 
– UL Solutions “Sins of Greenwashing” (n.d.)