Abstract
The paper analyzes the development and adaptation of the regulatory framework for corporate sustainability reporting in the European Union and Croatia, with particular emphasis on the postponement of the application of obligations and transitional exemptions introduced following the adoption of the Corporate Sustainability Reporting Directive (CSRD). The aim of the paper is to examine the extent to which regulatory amendments contribute to aligning the objectives of the sustainable transition with the need to preserve competitiveness and reduce the administrative burden on businesses. The research applies normative and analytical methods, including a review of European and national legislation as well as an interpretation of current legislative proposals. The results indicate a gradual alignment of the CSRD, the European Sustainability Reporting Standards, and the Corporate Sustainability Due Diligence Directive, alongside strengthened proportionality and a redefinition of the scope of obligated entities. Empirical indicators, including ESG rating results for 2025 and ESG Academy outcomes in the period from 2022 to 2025, confirm the growing institutionalization of sustainability in business practice. It is concluded that sustainability reporting is transforming from a primarily regulatory obligation into a strategic instrument for risk management and long-term competitiveness.