In this insight, we highlight the key sustainability developments in Europe in 2024, a year marked by significant activities such as the transposition of the CSRD into Belgian law, the further implementation of the EU Taxonomy , the introduction of VSMEs, the adoption of the Nature Restoration Law, and so much more.

 

VSME: Streamlining Sustainability Reporting for SMEs

In December 2024, EFRAG introduced the final text of the Voluntary Sustainability Reporting Standard (VSME) for non-listed Small and Medium-sized Enterprises (SMEs), providing a simplified framework aligned with European Sustainability Reporting Standards (ESRS). The VSME includes a Basic Module for key ESG disclosures and a Comprehensive Module for detailed reporting. It helps SMEs demonstrate sustainability commitment, enhance transparency, and access green financing, while providing standardized data for CSRD-compliant companies. EFRAG supports SMEs with tools and guidance for smooth adoption.

 

EUDR: One-Year Delay for Deforestation-Free Trade 

The EU Deforestation Regulation (EUDR), in force since 29 June 2023, ensures that certain commodities (e.g., cattle, wood, cocoa, soy, palm oil, coffee, rubber) and derived products sold in or exported from the EU are deforestation-free. Its primary goal is to minimize the EU’s contribution to deforestation and forest degradation globally. Originally set for 30 December 2024, the application date has been provisionally delayed by one year to 30 December 2025, giving stakeholders more time to prepare for due diligence obligations. The amendment does not change the regulation's substance, only the timeline, allowing for smoother implementation. Formal adoption is expected soon.

 

Belgium's CSRD Adoption: A Milestone in Sustainability Reporting

One of the significant milestones of 2024 being the transposition of the Corporate Sustainability Reporting Directive (CSRD) into Belgian law in November 2024. The Belgian parliament approved this legislation, which now mandates around 2,500 companies in Belgium to publish sustainability reports covering Environmental, Social, and Governance (ESG) sustainability topics. 

To support CSRD compliance, RSM introduced our CSRD Readiness Self-Assessment Tool and RSM Belgium published with Euronext a Double Materiality Guide. These resources help businesses evaluate their readiness, identify areas for improvement, and assess both financial and broader sustainability impacts.

 

CSRD Implementation: Two-Year Delay for Sector-Specific and Non-EU Reporting 

In January 2024, the European Parliament approved a two-year delay for the full implementation of the Corporate Sustainability Reporting Directive (CSRD), extending sector-specific and non-EU company reporting deadlines to 2026. This allows more time for companies to implement the finalised ESRS standards, with sector-specific guidelines helping businesses better address their environmental and social impacts. Non-EU companies with significant EU operations will also face a delayed deadline for the standard they can use to report 2028 data by 2029. The delay aims to ensure the standards are well-developed with input from initial reporting experiences.

 

TNFD: Guidance on Nature Transition Plans

The Taskforce on Nature-related Financial Disclosures (TNFD) has released this November 2024 a discussion paper offering draft guidance on nature transition plans for corporates and financial institutions. These plans align with the Kunming-Montreal Global Biodiversity Framework (GBF) to halt biodiversity loss by 2030 and achieve harmony with nature by 2050. The paper outlines key elements of nature transition plans, such as goals, actions, accountability, and resources, while excluding climate and carbon-related issues. Developed with partners like GFANZ, SBTN, and WWF, it guides businesses on defining and disclosing these plans and highlights areas for further work, encouraging businesses to test the framework for stronger biodiversity-focused action.

 

EU Taxonomy: Driving Green Investments

The EU Taxonomy, introduced in July 2020, classifies economic activities that contribute to the Green Deal's carbon neutrality goals. It helps direct investments, fight greenwashing, promote a sustainable economy, and supports the EU’s 2050 climate-neutral objectives. Covering nearly 100 economic activities across 13 sectors, the Taxonomy assesses eligibility and alignment based on three criteria: substantial contribution to one of six environmental objectives (e.g., climate change mitigation), no significant harm to other objectives, and adherence to minimum social safeguards . The Taxonomy disclosures have been expanded to include four non-climate objectives. This update was published in July 2023 and is applicable since 2024.

 

GHG Protocol and IFRS Partnership: Aligning Sustainability Reporting

In June 2024, the Greenhouse Gas (GHG) Protocol and the International Financial Reporting Standards (IFRS) Foundation signed a memorandum of understanding (MoU) to strengthen their collaboration. This agreement aims to align the GHG Protocol’s emissions measurement and reporting guidelines with IFRS Foundation’s financial reporting standards. By harmonizing these frameworks, the partnership will help reduce costs for companies and address the needs of capital markets. As part of the MoU, the International Sustainability Standards Board (ISSB) will have an observer on the GHG Protocol’s Independent Standards Board, ensuring ongoing collaboration and updates.

 

NRL: A Step Towards Biodiversity and Nature Restoration Goals 

Additionally, in June 2024, the EU Council adopted the Nature Restoration Law (NRL), aiming to restore 20% of degraded land and sea areas by 2030 and all ecosystems by 2050. The law sets binding targets for habitats, pollinators, agriculture, and forests, aligned with the EU Green Deal. Member states must submit National Restoration Plans within two years by the latest in September 2026, including 3 billion trees planted by 2030   . This law provides businesses an opportunity to assess their environmental impact, adopt mitigation strategies, and potentially gain significant returns—€1 invested in restoration can generate up to €38.

 

CSDDD Approval: New EU Directive for Large Companies

In April 2024, the EU Parliament approved the Corporate Sustainability Due Diligence Directive (CSDDD), which EU member states must transpose into national law within two years. The directive holds companies accountable for negative environmental and human rights impacts across their operations, subsidiaries, and value chains. It applies to large companies (over 1,000 employees and €450 million turnover, or €80 million turnover with €22.5 million royalties). Affected companies must create policies on due diligence, identify impacts, and take corrective action. Implementation begins in 2027, with SMEs in related business relationships possibly needing to comply.

 

ESAP: Cornerstone of the European Digital Finance Strategy

The European Single Access Point (ESAP), approved by the EU Council in late 2023, will centralize financial and sustainability data from EU companies to improve capital access. Operational by summer 2027, ESAP will include data from 35 EU regulations, including the CSRD/ESRS and EU Taxonomy. Companies must submit both human- and machine-readable sustainability reports, with auditors providing sustainability assurance. Businesses should prepare for this new annual reporting requirement.

 

RSiMS: AI-Driven Sustainability

Artificial intelligence (AI) is transforming various sectors, including sustainability, offering both opportunities and challenges for the economy, environment, and society. Recognized in the EU Green Deal for driving climate action, AI enhances data analysis, improves climate predictions, and boosts energy efficiency. At RSM Belgium, we leverage AI through tools like our RSiMS dashboards to help businesses track and optimize their carbon footprint in real-time. This integration supports sustainability goals by providing actionable insights while ensuring data accuracy, security, and compliance with non-financial reporting standards.

Looking ahead to 2025, we are excited to see how the sustainability initiatives of 2024 will continue to evolve, alongside new developments that will shape the future of sustainability. As Peter Drucker said, “The best way to predict the future is to create it.” Together, we are shaping a more sustainable future.
 

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