EU Simplifies Sustainability Reporting – What It Means

Helsinki – New European Union regulations, effective March 18, 2026, have significantly simplified sustainability reporting requirements for businesses. Under the revised rules, most Finnish small and medium-sized enterprises (SMEs) are now exempt from mandatory reporting, as the obligation only applies to companies with over 1000 employees and an annual turnover exceeding €450 million.

The changes stem from the Omnibus I package, which amended the Corporate Sustainability Reporting Directive (CSRD). Despite the regulatory relief, the demand for sustainability data remains critical. Large companies must still report their value-chain emissions, requiring their suppliers to provide relevant information. Furthermore, financial institutions, including banks and insurers, increasingly incorporate sustainability criteria into loan negotiations and contract renewals, driven partly by EU Green Finance guidelines.

For SMEs, this shift reduces administrative burdens and costs. However, businesses still need to collect and maintain essential sustainability data. Key metrics recommended for collection include energy consumption, employee headcount and well-being statistics, and governance principles. Having this data readily available in a digital format streamlines responses to customer questionnaires and funding applications.

Finago suggests that SMEs can manage sustainability data effectively without launching large, resource-intensive projects. The focus should be on collecting and storing core metrics. Finago's Procountor financial management software already captures much of this data, such as working hours, payroll costs, and financial figures. This information can be supplemented with environmental metrics and integrated with dedicated sustainability solutions, minimizing manual data collection.