Is ESG Platform the Amazing Secret to Nailing CSRD Reporting?

Are You Making a Terrible Mistake by Ignoring ESG Reporting Software?

Things are changing for businesses. It is no longer enough just to make a profit. Customers, investors, and now, governments, want to know that companies are being responsible. They want to see how a business impacts the environment, how it treats people, and how it is run.

This is known as Environmental, Social, and Governance, or ESG. For many companies, especially in Europe, reporting on these things is about to become a serious legal duty. This has created a need for new tools to help make this complicated job much easier. One company that has stepped up to help is a European startup called Atlas Metrics.

What is Atlas Metrics? A Simple Guide

Think of Atlas Metrics as a helper for businesses that need to track and report their ESG activities. It is a single platform where a company can manage all of this new, non-financial information. Instead of using spreadsheets and sending emails back and forth, which can be messy and slow, Atlas Metrics puts everything in one organized place.

The platform serves several important functions to help a business understand and improve its impact:

Carbon Accounting

This involves calculating the company’s “carbon footprint,” which is the total amount of greenhouse gases it produces. It helps a business see where its biggest environmental impacts are coming from.

Double Materiality Assessment

This sounds complicated, but the idea is simple. It helps a company figure out two things: first, how sustainability issues might affect the company’s finances, and second, how the company’s actions affect the planet and people. It’s a two-way view.

Goal Tracking

If a company sets a goal, like reducing its waste by 20%, the platform helps track progress toward that goal. It shows what’s working and what isn’t.

Multi-Party Data Collection

Often, a company’s biggest impact comes from its suppliers. This feature helps a business collect ESG information from all the other companies it works with, giving a much bigger and more accurate picture.

The most powerful feature is how it automates the final report. Atlas Metrics claims that its platform can cut the time it takes to create an ESG report by 90%. With just one click, all the collected data is turned into a professional report on a special microsite. The company can choose to make this website public for everyone to see or keep it private with a password.

Investors are taking notice of this solution. Atlas Metrics recently secured €12.2 million in funding to grow its team, expand to new areas, and improve its platform. The goal is to turn sustainability data from a chore into something that gives a business a competitive edge. High-profile clients like the European investor KfW Capital are already using the platform to track a portfolio of over 100 funds and 1,300 companies.

Why This Is Happening Now: The Corporate Sustainability Reporting Directive (CSRD)

The rise of platforms like Atlas Metrics is not a coincidence. It is a direct response to new, strict rules coming from the European Union. The main driver is the Corporate Sustainability Reporting Directive (CSRD). This directive is a major update to previous, less stringent rules and will require tens of thousands of companies to report on sustainability in a detailed and audited way.

For many businesses, this is a huge change. A recent survey showed that 32% of businesses in the UK feel “completely unprepared” for these new requirements. The CSRD is being rolled out in phases, meaning different types of companies will need to comply at different times. Understanding this timeline is critical.

Here is a simple breakdown of the deadlines :

Phase 1 (Reporting in 2025)

This applies to large, public-interest companies with over 500 employees that were already subject to the previous rules (the Non-Financial Reporting Directive, or NFRD). They will need to report on their 2024 financial year.

Phase 2 (Reporting in 2026)

The rules expand to cover all other “large” companies. A company is considered large if it meets at least two of these three criteria: more than 250 employees, a turnover of more than €40 million, or more than €20 million in total assets. These companies will report on their 2025 financial year.

Phase 3 (Reporting in 2027)

This phase brings in listed small and medium-sized enterprises (SMEs). They will begin reporting on their 2026 financial year.

Phase 4 (Reporting in 2029)

The final phase includes certain non-EU companies that do significant business in the EU. This applies to companies with a turnover in the EU of more than €150 million and that have a branch or subsidiary in the EU. They will report on their 2028 financial year.

Failing to comply comes with significant risks. For example, a German company with a revenue of €100 million could face an annual cost of €250,000 for manual compliance and a fine of up to €5 million (5% of turnover) for not complying at all. This makes having an efficient system not just a nice-to-have, but a financial necessity.

The Growing Market for ESG Software

The combination of new regulations and public pressure has created a rapidly growing market for ESG tracking software. Companies are realizing that managing this data manually is no longer a viable option. About 45% of publicly traded companies in the U.S. have already set a net-zero target, and they need tools to gather data and show their progress.

This trend is set to accelerate. A recent survey revealed that 74% of large companies are likely to invest in new technology for ESG reporting within the next year. This demand is fueling incredible growth in the market. The global market for ESG reporting software is expected to grow from just under $1 billion in 2024 to more than $2.6 billion by 2031. That is an average growth rate of more than 15% every year.

This market growth is attracting many innovative startups, each offering a slightly different approach to solving the ESG data problem.

Other Trending ESG Startups

While Atlas Metrics offers an all-in-one solution, other startups are focusing on more specific parts of the ESG puzzle. Here are a few others that are gaining attention:

NZero

This company focuses on carbon accounting. It uses artificial intelligence (AI) to collect and analyze data in real-time. A key feature of NZero’s platform is its ability to model different scenarios. This allows a business to analyze which actions to reduce carbon will give the best return on investment (ROI).

Persefoni

Persefoni provides a complete platform for managing a company’s carbon footprint from start to finish. This includes managing emissions data, finding “carbon hot spots” within the business, and creating plans to decarbonize in a way that maximizes the financial return.

Emitwise

This startup has a very specific and important focus: the supply chain. For many businesses, especially in manufacturing, construction, and fashion, up to 70% of total emissions can come from suppliers. Emitwise has created software designed specifically to track, manage, and reduce the carbon footprint of these complex supply chains.

The existence of these specialized platforms shows how complex the world of ESG is. Some companies may need a comprehensive tool like Atlas Metrics to handle all their CSRD reporting, while others might need a specialized tool like Emitwise to tackle a specific problem area like their supply chain.