Is the Future of Sustainability Sustainable?

On 26th February this year, following calls from EU leaders, the European Commission introduced two ‘omnibus’ legislative packages aimed at simplifying existing laws in the areas of sustainability and investment.

Then, on 14th April, the European Council adopted the ‘Stop-the-Clock’ mechanism - delaying by two years the CSRD (Corporate Sustainability Reporting Directive) requirements for large companies that have not yet begun reporting. As a result, only Public Interest Entities (PIEs) under the 2024 bracket remain obligated to report for now.

Dr Rosie O'Neill, Director of Sustainability

In June 2025, European Council also agreed on a common position to simplify standards regarding sustainability reporting and due diligence requirements, with the goal of boosting EU competitiveness.

So where does this leave companies that have already heavily invested in preparing for these new obligations? What happens to dedicated sustainability teams and established emissions reduction targets? While major policies like the EU Green Deal, Ireland’s Climate Action Plan, and the Nature Restoration Law remain unchanged, this shift in momentum raises serious concerns. How will it affect our progress toward net-zero goals and the restoration of natural ecosystems by 2050?

The outlook, frankly, isn’t promising. Having personally read through the CSRD and the associated European Sustainability Reporting Standards (ESRS) - an eye-watering 284 pages - I can say simplification is very welcome. The original legislation placed a heavy burden on companies to report extensive and granular data, instead of starting with critical, accessible datapoints and evolving from there.

So yes, simplification is good. But why change the scope?

By limiting reporting obligations to only the largest companies - many of whom were already reporting - we risk sidelining small and medium-sized enterprises (SMEs) that are the foundations of the value chain. This is a mistake. If every company reported at least their direct emissions (from electricity, fuel, and heating), we’d capture a substantial portion of the so-called "missing" Scope 3 emissions that large companies struggle to estimate.

SMEs: The Missing Link

According to the CSO’s 2022 Business in Ireland report, SMEs make up 99.8% of all enterprises in Ireland. While large companies (with 250+ employees) employ 32.1% of the workforce and generate 59.4% of Gross Value Added (GVA), SMEs still account for 67.9% of employment and 40.6% of GVA. That’s a massive part of the economy - and the emissions story - we're failing to track.

Without SME data, we miss key insights into areas like commuting fuel use, public transport uptake, and building energy efficiency. What we’ll be left with is data disproportionately representing large companies in urban centres, ports, and industrial zones - distorting the broader picture.

What Now?

Can we encourage SMEs to report voluntarily? If so, where will this data go, and how will it be consolidated and used effectively? Have people started to tune out from sustainability altogether? And if they have, how much progress can we realistically make?

There is still hope - and opportunity. Even if companies focus solely on efficiency, the savings from simply measuring and managing consumption can be remarkable. Sustainability isn’t only about emissions; it’s about people too. Small, thoughtful actions can make a big difference - boosting employee wellbeing, cutting costs, and building business value.

Even in uncertain times, every step still matters. Efforts made today build toward a better, more resilient tomorrow. So, if sustainability is something you are interested in but are not sure how to get started or progress, get in contact with us in ifac.