The ‘table stakes’ of enterprise sustainability efforts are to help ensure a livable, comfortable planet for future generations. But greener and cleaner operations are also just flat-out good for business. 

One trending example is the hype surrounding incumbent generative AI platform DeepSeek. Putting the geopolitics of AI development aside, the global business community’s reaction to the new tool is worth digging into: By slashing compute power, development time, associated emissions, and the overall costs to create by such a massive order of magnitude, DeepSeek was able to upend the entire global tech ecosystem in just a matter of hours.  

In this scenario, enterprise sustainability goals (ESG) weren’t the impetus of the project—or even the main headline around what makes DeepSeek such a disruptor.  

However, the agility and scalability of the app was enabled through strategically-efficient development practices that could offer a more cost-effective “path forward” for businesses and consumers.  

Placing more businesses on a cleaner, greener path to success is what’s motivating international governments to start mandating stronger commitments to sustainability across their entire operations. This goes beyond adopting net-new solutions like AI and includes transforming many legacy areas of the business—read: passenger fleets—to drive broad-based business outcomes well beyond environmental efficiency. 

In this blog, we’ll unpack the details of the biggest sustainability reporting mandate currently impacting global businesses, and how companies stateside can better report on their emissions data while also scaling-back their carbon footprint—and, eventually, unlocking growth. 

From best practice to legal mandate 

Although the DeepSeek example makes a strong business case for embracing sustainability as a ‘best practice,’ a wide swath of companies will need to start achieving—and reporting on—sustainability goals to avoid legal repercussions.  

Much like the storied launch of the General Data Protection Regulation (GDPR), the European Union (EU) continues the charge on business accountability—this time, focusing on the environment with the Corporate Sustainability Reporting Directive (CSRD). Originally passed in 2022, this legislation dictates that starting in 2025, a wide swath of non-EU based businesses will need to start sharing “how sustainability matters affect the company’s development, performance, and position” to the European Council. 

The US-based businesses who meet the new reporting threshold in 2025 must have at least one subsidiary based in the EU, and feature at least two of the following criteria on their balance sheets: 

• Greater than €20 million balance sheet total. 

• Greater than €40 million net turnover. 

• Greater than 250 employees in the EU.  

By even the most conservative estimates, hundreds of US businesses fall within this criteria already.  

Many reporting features are still up for debate 

The CSRD requires disclosure from a “double materiality” perspective, looking at how sustainability efforts impact both the company’s own financials (performance, position, and development) as well as their outward impact (people and the environment).  

CSRD also specifies that companies should consider each materiality perspective and “disclose information that is material from the financial perspective, the impact perspective, or both.” That said, the disclosure requirements of the ESRS are extensive, with an estimated 84 in total covering both quantitative and qualitative disclosures 

Currently, the European Council and representatives across the EU are holding an omnibus session on the CSRD, including hearing feedback from businesses and governments that fear they won’t be able to meet the current standards in time to comply. Arguments have included limiting the mandate to only companies with 1,000+ employees, or shifting the current timeline by a year to accommodate deployment delays due to geopolitical uncertainties. 

While broad reporting mandates have been defined, it’s expected that deliberation among EC stakeholders is set to go through the end of February. US-based businesses, however, will most likely still be on the hook for reporting their ESG progress regardless of how current discussions pan out. 

What do US companies need to do to prepare for ESG reporting in EU 

U.S.-based companies with significant operations in EU countries should consider the following questions: 

• Have you evaluated how your organization will be affected by the CSRD and supporting ESRS requirements (compared to current ESG policy or local mandates)? 
• Have you compared your company’s current sustainability goals with the CSRD’s double-materiality requirements? 
• Do you have data processes and controls in place to be able to report the required sustainability information? This includes: 
  • Adhering to a much more thorough financial reporting standard than what’s ever been proposed by the SEC or governing bodies stateside 
  • Backing-up this reporting data through third-party sources for “limited assurance” validation.  

Better practices to unlock more powerful reporting 

While there will certainly be more to unpack as the final features of this global mandate firm up over the coming weeks and months, the sooner businesses can both fortify their sustainability strategies and employ better reporting techniques, the better.  

Perhaps the biggest, quickest impact for many businesses is zeroing in on their vehicle programs—especially for businesses that rely on legacy passenger fleet or ‘company cars’ for their workforce.  

At a baseline, companies should re-evaluate whether it’s worth it for them to take on the liability—in terms of taxes, insurance, safety and environmental impact—of owning and maintaining a fleet of vehicles on their employees’ behalf.  

Vehicle reimbursement programs, for instance, allow individual employees to drive their own personal vehicles for work. Not only can employees then choose to purchase more environmentally friendly vehicles, but the responsibility of emissions is only attributable to the employer for the miles driven for work.  

To that end, program administrators can design reimbursement programs that mandate certain kinds of ‘green’ vehicles, while leveraging tools that go beyond just tracking mileage, recommending sustainable best practices and even route optimization that can be seamlessly reported on.  

To learn more about how to design a vehicle program that gives your team the reporting, data and action items to achieve ESG success, talk to the Motus team today.  

EU Sustainability Reporting: 5 Key FAQ for US Businesses 

Q1: What is the Corporate Sustainability Reporting Directive (CSRD)? 

The CSRD is a European Union mandate requiring businesses to report on sustainability matters, impacting some US businesses starting in 2025. It requires companies to disclose how sustainability impacts their financial performance and broader environmental influence, covering 84 total disclosure requirements. 

Q2: Which US Companies Are Affected by CSRD? 

US businesses must meet these criteria to comply: 

• Have at least one EU subsidiary 
• Meet 2+ of these requirements:  
  • Balance sheet over €20 million 
  • Net turnover over €40 million 
  • 250+ EU employees 

Q3: What Does “Double Materiality” Mean in CSRD? 

Double materiality requires companies to report sustainability impacts from two perspectives: 

• Internal financial performance 
• External impact on people and environment 

Q4: What Challenges Do Companies Face with CSRD? 

Current challenges include: 

• Extensive reporting requirements 
• Need for third-party data validation 
• Potential timeline and employee threshold debates 
• Developing robust data tracking processes 

Q5: How Can Companies Improve Sustainability Reporting? 

Key strategies include: 

• Reassessing vehicle programs 
• Implementing employee vehicle reimbursement 
• Mandating green vehicle requirements 
• Using advanced tracking and route optimization tools 
• Designing comprehensive ESG reporting mechanisms 

Disclaimer: Consult with ESG experts for specific implementation strategies.