As environmental, social, and governance (ESG) compliance becomes a critical priority for businesses worldwide, Microsoft Dynamics 365 Business Central is evolving to meet these growing demands. 

The 2025 release wave introduces powerful new sustainability features designed to help organisations streamline ESG reporting, including robust support for the Corporate Sustainability Reporting Directive (CSRD) and other regulatory frameworks. 

These enhancements reflect Microsoft’s commitment to enabling businesses to manage their environmental impact while maintaining operational efficiency.

Integrated ESG Reporting with Dynamics 365 Business Central

One of the standout innovations in the 2025 Business Central update is the seamless integration of the Project ESG Reporting app with the core Sustainability module.

It allows users to capture, manage, and report sustainability data directly within Business Central, eliminating repetitive data entry and reducing errors.

• Comprehensive Data Capture: Users can track environmental impacts such as greenhouse gas (GHG) emissions, water usage, and waste intensity through general journals and purchase documents within Business Central.
• Social and Governance Metrics: Beyond environmental data, the system supports tracking social and governance factors using statistical accounts, providing a holistic ESG overview.
• Regulatory Alignment: The solution aligns with multiple reporting standards, including CSRD (Europe), ASRS, and BRSR, making it easier for businesses to comply with diverse regulatory requirements.
• Streamlined Reporting Workflow: After aggregating data in Business Central, users can transfer it to the Project ESG Reporting app to add contextual information and generate regulatory-compliant submission files, simplifying the entire ESG reporting process.

Preparing for CSRD Reporting

The Corporate Sustainability Reporting Directive (CSRD) significantly expands the scope and detail of sustainability disclosures required from companies operating in the European Union. Business Central’s 2025 features include dedicated tools to simplify CSRD compliance:

• CSRD Preparation Reports: Businesses can configure taxonomies within Business Central to aggregate data from various transactional sources, tailored to their specific needs.
• Report Generation: Even without external ESG reporting tools, users can generate CSRD preparation reports directly from Business Central, providing a structured document for regulatory submissions.
• Automatic Enablement: These features are automatically available to users from May 2025, facilitating early adoption and compliance readiness.

Detailed Emissions Tracking Across Scopes

Business Central’s Sustainability Manager enables companies to monitor emissions comprehensively across all three recognised scopes:

• Scope 1: Direct emissions from owned or controlled sources (e.g., on-site fuel combustion).
• Scope 2: Indirect emissions from purchased energy (e.g., electricity).
• Scope 3: Other indirect emissions within the value chain, including business travel, purchased goods, and waste.

The system supports tracking of key greenhouse gases such as methane (CH₄) and nitrous oxide (N₂O), alongside carbon dioxide equivalents (CO₂e), providing a detailed and standardised view of environmental impact.

Enhanced Sustainability Management Features

Beyond emissions tracking, Business Central 2025 introduces several features to help businesses embed sustainability into their operations:

• Sustainability Journals and Ledgers: Capture and consolidate sustainability data alongside financial records, enabling integrated analysis and reporting.
• Carbon Credits Management: Track carbon credit acquisitions to offset emissions directly within the system.
• Water and Waste Management: New capabilities allow organisations to monitor water usage and waste generation, aligning with broader sustainability goals.
• Sustainability Certificates: Record and manage certifications for vendors and items, helping companies demonstrate the sustainability credentials of their supply chain.
• Scorecards and Targets: Set and monitor sustainability goals with baseline, target, and actual values to track progress over time.

Sustainability Insights with Power BI Integration

Starting June 2025, Business Central users will benefit from enhanced sustainability analytics through Power BI:

• Prebuilt Reports: Access detailed dashboards showing emissions by category and scope, CO₂e analysis, progress toward net-zero targets, and water and waste metrics.
• Social and Governance Metrics: Track workforce diversity, employee qualifications, and other social indicators to gain a comprehensive ESG perspective.
• Data-Driven Decisions: These insights enable businesses to make informed sustainability decisions, improve compliance, and communicate performance effectively to stakeholders.

Why These Features Matter for Your Business?

With increasing regulatory pressure and stakeholder demand for transparency, sustainability reporting is no longer optional. Dynamics 365 Business Central’s 2025 sustainability features provide a practical, integrated solution for businesses of all sizes to:

• Ensure compliance with evolving ESG regulations such as CSRD.
• Reduce administrative burden through automation and integration.
• Gain a comprehensive understanding of environmental impacts across their operations.
• Demonstrate commitment to sustainability to customers, investors, and regulators.
• Leverage data-driven insights to improve sustainability performance and operational efficiency.

For companies already using Business Central, these tools offer a clear path to meet current and upcoming sustainability requirements. For those considering ERP solutions, Business Central stands out as a forward-looking platform that combines business management with environmental accountability.

Conclusion

The 2025 wave of Dynamics 365 Business Central marks a significant step forward in sustainability management and ESG reporting. 

By integrating advanced data capture, regulatory alignment, and analytics capabilities, Microsoft empowers businesses to navigate the complex landscape of sustainability compliance with confidence and efficiency.

Get in touch with the experts at Osmosys to learn more.