ERP and Sustainability: Transform Sustainability Management with Dynamics 365 Business Central

Sustainability regulations in the EU: Corporate Sustainability Reporting Directive (CSRD) 

The Corporate Sustainability Reporting Directive (CSRD) is a regulation in the European Union that expands the sustainability reporting requirements for companies operating in the EU. It replaces the Non-Financial Reporting Directive (NFRD) by extending the transparency on the environmental impact of companies. 

The CSRD, effective from 2024, builds on the Non-Financial Reporting Directive (NFRD), requiring companies to report the impact of their activities on the environment, society and governance under the European Sustainability Reporting Standards (ESRS). This directive applies to all large EU companies and those listed on EU-regulated markets, including non-European companies with significant EU operations.  

As sustainability becomes a core part of business management and reporting, companies should turn to Enterprise Resource Planning (ERP) systems that simplify the tracking of their environmental impact.  
 

Sustainability and ERP: Driving Business Efficiency and Environmental Responsibility

In its latest updates, Microsoft has enhanced the sustainability features of Dynamics 365 Business Central, providing expanded capabilities for tracking and managing environmental impact. The ERP system provides several benefits for ensuring compliance with sustainability regulations and directives, including: 

• Carbon footprint tracking with Sustainability Journals 

Companies can monitor and report greenhouse gas emissions (GHG) with the sustainability journals in Business Central. Sustainability journals are designed to track sustainability-related activities. You can enter emissions and water or waste intensity in a journal and when posting this journal, the information is transferred to sustainability ledger entries, which provide a detailed overview of all environmental metrics. 
 

• Chart of Sustainability Accounts  

You can easily organize and monitor sustainability metrics with the structured framework in Business Central – Chart of Sustainability Accounts. It works similarly to the traditional Chart of Accounts used for financial data, but for sustainability metrics such as carbon emissions, energy consumption, waste management, etc. 
 

• Sustainability Ledger Entries 

These entries give users centralized control and visibility over their sustainability data. This is a crucial part of following the company’s overall environmental performance. By capturing all sustainability data in the ledger, organizations can easily comply with environmental regulations and frameworks. Sustainability Ledger Entries are integrated into the General Ledger, allowing companies to align their environmental and financial data and consider their business strategy alongside their sustainable impact. 

What new features does the latest Business Central release bring? 

• Generate a CSRD preparation report 

The new update in Dynamics 365 Business Central allows you to print reports with prepared data and taxonomies if you don’t want to deal with additional integration for ESG reporting.   
 

• Specify default sustainability values for various entities  

You can now improve sustainability tracking by setting default values for different business entities, ensuring that the environmental impact data of your company is recorded and reported. You can specify certain values, such as G/L Account, Item, Item Category, Resource, Work Center, Machine Center. 
 

• New feature for water and waste management  

Microsoft is expanding the sustainability features in Business Central by including water and waste management. This is a key feature for compliance with the CSRD as it allows companies to track more data alongside their greenhouse emissions. 

Companies can use Sustainability Journals and Recurring Sustainability Journals to log water and waste intensity data. What is more, all data for gas emissions, water and waste is stored in the Sustainability Ledger Entries, which ensures there is one single source for reporting. The feature also includes some specific tracking metrics such as water types, intensity types, etc. 

Explore the new features, part of the Dynamics 365 Business Central 2025 release wave 1 
 

Microsoft is investing in the sustainable future of businesses by developing cutting-edge features. The advanced functionalities in Business Central ERP make sustainability reporting and compliance with the EU regulations significantly easier for companies. 

What is more, businesses are fostering great ecological conscience by actively tracking and reporting the impact of their operations on the planet. This ensures all sustainability requirements are met while also raising more awareness on sustainable practices.