How EUDR and CSRD work together to drive sustainable business

As businesses grapple with an evolving regulatory landscape, two key EU sustainability frameworks are reshaping how companies approach environmental compliance and reporting.

The EU Deforestation Regulation (EUDR) and Corporate Sustainability Reporting Directive (CSRD) may seem like separate challenges, but they form part of an integrated push toward more sustainable business practices.

Both regulations are part of the European Green Deal, which aims to make the EU climate-neutral by 2050. Although they have different focuses, they complement each other in their ambitions to drive positive environmental change.

Different but complementary

EUDR and CSRD work together but in different ways. EUDR is about concrete compliance and verification, while CSRD focuses on comprehensive reporting and transparency.

The EUDR, which is due to come into full force at the end of 2025, specifically targets companies importing or trading certain commodities linked to deforestation. Namely, palm oil, cocoa, coffee, soy, timber, and rubber. Its goal is clear: ensure these products entering the EU market aren’t contributing to global deforestation or forest degradation.

The CSRD, meanwhile, aims to create standardised, transparent sustainability reporting across the EU. It requires companies to report comprehensively on their environmental, social, and governance (ESG) performance across a wide range of data points.

Impact on businesses

The dual implementation of EUDR and CSRD creates both significant challenges and strategic opportunities for businesses. Understanding these can help organisations better prepare for compliance while maximising the benefits of their sustainability efforts.

The two frameworks have distinct requirements. EUDR demands specific technical documentation, including geolocation data for commodity sources and robust supply chain traceability systems. CSRD, on the other hand, requires extensive reporting across a range of ESG factors. As part of this, it requires companies to conduct a “double materiality assessment” – analysing both how sustainability issues affect their business and how their operations impact the environment and society.

For many companies, collecting and verifying the data required by the EUDR and the CSRD  will present major challenges. Currently, many companies lack the infrastructure to collect this information systematically, particularly from suppliers with varying levels of technological maturity.

Resource allocation poses another challenge, with companies needing to invest in new systems and expertise. This is particularly demanding for smaller organisations balancing multiple compliance requirements.

Mutually supportive

For businesses caught by both regulations, there is some good news, however: work done to comply with EUDR can feed directly into CSRD reporting requirements.

Companies can leverage compliance requirements to optimise supply chains, identifying inefficiencies and potential cost savings while improving traceability. Data and systems implemented for EUDR compliance, for example, can support CSRD disclosures, particularly in areas like biodiversity and land use. Similarly, the comprehensive assessment required by CSRD helps organisations better understand and manage risks, while increased transparency can strengthen stakeholder relationships.

There are key differences, though, particularly in terms of reporting requirements. EUDR focuses on specific compliance documentation, primarily shared with customs authorities. CSRD demands public-facing sustainability reports that must be published alongside financial statements, covering a wide range of ESG factors.

Staggered timelines

EUDR enforcement begins in 2025. For CSRD, the picture is less clear. Currently, large public-interest companies are due to report in 2025, with more businesses coming into scope  in subsequent years. In February 2025, however, the European Commission published its ‘Omnibus’ proposal which aims to simplify both the CSRD and the related Corporate Sustainability Due Diligence Directive (CSDDD).

If adopted in its current form, the Omnibus proposal will significantly change the scope of CSRD. It will reduce the number of companies required to report from 50,000+ to around 7,000, dramatically reduce the number of data points companies are required to report against, and delay the reporting timelines.

Notwithstanding the proposed changes to CSRD, early preparation is crucial for successful compliance with both regulations. Companies should begin preparing now, even with some details still being finalised. The CSRD’s double materiality assessment alone – unchanged by the Omnibus proposals – can take six months, and building proper sustainability strategies and data collection systems takes time.