The Microsoft Dynamics 365 Business Central 2025 Wave 1 release brings a host of exciting updates aimed at enhancing functionality, improving user experiences, and boosting operational efficiency.
This blog delves into several key areas, with a particular focus on legislative updates, which we will explore in detail. Among the most notable updates are new sustainability management features, which allow businesses to better track and manage their sustainability goals. With the integration of carbon footprint data into financial and operational reports, businesses can now monitor their environmental impact alongside financial performance. Enhanced emissions tracking and reporting capabilities also help companies meet regulatory requirements while making more informed sustainability decisions. These updates provide businesses with the tools to reduce their environmental footprint and contribute more effectively to their sustainability objectives.
Sustainability Management
The Sustainability Management capabilities in Business Central are evolving based on customer feedback and new regulations. These tools help businesses effectively track, analyse, and report on their environmental impact.
- Generate a CSRD preparation report
- Enable taxonomy elements for ESRS and other standards
- Use enhanced analytics for Sustainability
- Capture sustainability data with general journals
- Use water and waste management with sustainability
- Enable sustainability Scope 3 value chain for assembly and transfers
- Provide carbon equivalent data for sales based on Scope 3 automation
- Use ESG Reporting integrated with Business Central
- Start value chain in purchase process for Scope 3 in sustainability
- Use sustainability Scope 3 value chain in manufacturing
- Use new Out of Scope emission category.
1. Generate a CSRD preparation report
The latest Business Central update simplifies Corporate Sustainability Reporting Directive (CSRD) compliance by enabling businesses to generate reports with pre-configured data and taxonomies, without needing an integrated ESG reporting tool. Users can configure taxonomies, aggregate data, and create report layouts for CSRD preparation.
Key Benefits:
- Simplifies CSRD reporting without the need for ESG reporting tool integration.
- Helps aggregate data and taxonomies for efficient reporting.
- Configurable to fit specific business needs, with tailored taxonomies.
- Streamlines the reporting process, saving time and effort.
- Enhances user experience with automatic feature enablement.
Key Features:
- Configurable taxonomies based on various transactional data sources.
- Pre-configured setup using demo data, which can be adjusted for specific needs.
- Ability to aggregate existing data according to the configured taxonomies.
- Option to generate a report layout as a preparation document for CSRD reporting.
- Automatically enabled for users, improving usability and access.
2. Enable taxonomy elements for ESRS and other standards
Business Central streamlines Corporate Sustainability Reporting Directive (CSRD) compliance by enabling businesses to map their data to required taxonomies, ensuring accurate and transparent sustainability reporting. By integrating European Sustainability Reporting Standards (ESRS) and other frameworks, businesses can simplify compliance, save time, and reduce the risk of noncompliance.
Key Features and Benefits:
- Effortless Taxonomy Mapping: Configure taxonomies using various transactional data sources for structured sustainability reporting.
- Flexible Setup: Pre-configured demo data can be adjusted to meet specific business needs.
- Data Aggregation: Collect and structure sustainability data for specific reporting periods.
- ESG Reporting Integration: Prepare and transfer data to an ESG reporting tool with a preconfigured CSRD template for adding missing metrics.
- Future-Proofing: Planned extensions to support additional ESG reporting standards.
With these capabilities, Business Central helps EU-based companies streamline CSRD reporting while ensuring compliance with evolving sustainability regulations.
3. Use enhanced analytics for Sustainability
Business Central’s latest improvements in sustainability reporting and analytics empower businesses to track new KPIs and scenarios using Power BI. With enhanced documentation and teaching tips, organisations can fully leverage these features to drive data-driven sustainability initiatives.
Key Features and Benefits:
- Expanded Power BI Sustainability KPIs and scenarios: Track emissions by category and scope, CO2e analysis, net-zero progress, and water and waste metrics.
- Social and Governance Insights: Monitor KPIs such as gender and age distribution, qualifications, and other workforce metrics.
- Comprehensive Reporting Tools: In addition to Excel-based reports, new Power BI analytics provide deeper sustainability insights.
- Guided Learning: Teaching tips and detailed documentation help businesses maximise reporting effectiveness.
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With these enhancements, businesses can gain a clearer understanding of their sustainability impact and make informed decisions to achieve their ESG goals.
4. Capture sustainability data with general journals
Business Central now enables businesses to record greenhouse gas emissions directly in general journals, allowing for seamless integration of environmental and financial data. This enhancement helps companies track their carbon footprint, apply double materiality principles, and make informed sustainability decisions.
Key Features and Benefits:
- Integrated Reporting: Record emissions alongside financial data in a single journal entry.
- Enhanced Sustainability Insights: Identify high-emission activities and optimise resource management.
- Regulatory Compliance and Corporate Responsibility: Meet sustainability regulations while strengthening brand reputation.
- Easy Data Access: Use the Find Entries action to locate related sustainability data in the General Ledger Entries and Posted General Journal pages.
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By embedding environmental data within financial records, businesses can drive sustainability initiatives, attract eco-conscious customers, and improve operational efficiency.
5. Use water and waste management with sustainability
Business Central now enables businesses to track water and waste intensity, enhancing sustainability measurement and compliance reporting – particularly for the Corporate Sustainability Reporting Directive (CSRD). These new capabilities provide a more comprehensive view of environmental impact alongside emissions tracking.
Key Features and Benefits:
- Broader Sustainability Metrics: Track water and waste intensity using new Emission Scopes.
- Simplified Data Collection: Use account groups, subgroups, and formulas for efficient reporting.
- Unified Sustainability Ledger: Report gas emissions, water, and waste from a single source.
- Detailed Water and Waste Tracking: Monitor Water Intensity, Discharged into Water, and Waste Intensity with specific categories like Withdrawn, Recycled, and Disposed.
- Enhanced Sustainability Goals: Expand goal-setting to include water and waste management.
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With these improvements, businesses can better assess their environmental impact, streamline reporting, and meet evolving sustainability regulations.
6. Enable sustainability Scope 3 value chain for assembly and transfers
Business Central now streamlines the collection, calculation, and reporting of Scope 3 emissions, improving accuracy, efficiency, and regulatory compliance. As Scope 3 emissions often represent the largest portion of a company’s carbon footprint, this automation enhances decision-making and aligns with sustainability goals.
Key Features and Benefits:
- Automated CO2e Calculations: Track emissions across assembly and transfer processes.
- Integrated Value Chain Tracking: Capture emissions from purchase documents and update them through inventory activities.
- New Tracking Fields: CO2e per Unit and Total CO2e fields added to Transfer and Assembly Orders.
- Accurate Emission Valuation: Uses the Average method from Sustainability Value Entries for precise calculations.
- Prevents Double Posting: Emissions data is logged in Sustainability Value Entries without duplicating Sustainability Ledger Entries.
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These enhancements enable businesses to gain deeper insights into their value chain emissions, supporting sustainability initiatives and regulatory compliance.
7. Provide carbon equivalent data for sales based on Scope 3 automation
Business Central now streamlines Scope 3 emissions tracking by automating data collection, calculation, and reporting across the value chain. Since Scope 3 accounts for the majority of emissions, this enhancement improves accuracy, efficiency, and regulatory compliance.
Key Features and Benefits:
- Automated Emissions Calculation: Provides accurate emissions information about the items you sell. CO2e per Unit and Total CO2e fields are now available on sales document lines.
- Comprehensive Value Chain Tracking: Integrates emissions data from vendors, transfers, and manufacturing.
- Accurate Sustainability Reporting: Uses Sustainability Value Entries (Average method) for consistent calculations.
- Improved Compliance and Decision-Making: Provides greater visibility into product-level emissions.
This update empowers businesses to track emissions more effectively, align with sustainability regulations, and support informed environmental decision-making.
8. Use ESG Reporting integrated with Business Central
Microsoft has enhanced its sustainability reporting by integrating Business Central with the Project ESG Reporting app. This new feature streamlines compliance with regulations like CSRD, ASRS, and BRSR, eliminating redundant data entry and allowing businesses to manage non-transactional ESG data efficiently.
Key Features and Benefits:
- Effortless ESG Compliance: Aligns sustainability data with regulatory taxonomies for smooth reporting.
- Integrated Scope 1, 2, and 3 Tracking: Transfers emissions data from Business Central to the ESG Reporting app.
- Enhanced Reporting Capabilities: Enables contextual additions before generating regulatory-compliant reports.
- Optimised for SMBs: Simplifies complex ESG reporting requirements for small and medium-sized businesses.
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This integration marks a significant step in enhancing collaboration across Microsoft business applications, improving efficiency, and ensuring compliance with evolving sustainability standards.
9. Start value chain in purchase process for Scope 3 in sustainability
Microsoft has enhanced Scope 3 value chain process automation within Business Central ERP, streamlining the collection, calculation, and reporting of indirect emissions data. This feature improves accuracy, efficiency, and compliance with sustainability goals by tracking emissions from the purchase process onward.
Key Features and Benefits:
- Comprehensive Emission Tracking: Captures emissions from vendors and internal operations (transfers, manufacturing, etc.).
- Automated Emission Valuation: Posts sustainability ledger and value entries upon purchase invoice posting within the ERP system.
- Seamless Integration: Tracks emissions throughout business processes for more accurate reporting.
- Regulatory Compliance: Helps align with sustainability regulations and reporting standards.
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Currently, this feature supports item-based emission tracking using the Average calculation model, with future enhancements planned within the ERP system.
10. Use sustainability Scope 3 value chain in manufacturing
Business Central ERP enhances Scope 3 value chain process automation, enabling accurate tracking, calculation, and reporting of indirect emissions data across both upstream and downstream operations. This feature provides more control by enabling users to track emissions in the manufacturing process. This automation supports sustainability goals by improving efficiency, accuracy, and compliance with regulatory standards.
Key Features and Benefits:
- Comprehensive Emission Tracking: Tracks emissions from raw materials through manufacturing processes and final goods, using data from purchase documents and internal operations.
- Automatic CO2e Calculation: New fields in the Production BOM, Routing, Components, and Production Order Lines calculate CO2e based on raw material consumption and manufacturing output.
- Accurate Emission Valuation: Uses the Average method from the Sustainability Value Entries page to calculate and track emissions.
- Seamless Integration: Links emissions data item ledger entries, adds a sustainability value entry that references the item ledger entry and captures CO2e related information.
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This feature provides better control and flexibility, offering enhanced sustainability reporting capabilities within the ERP system.
11. Use new Out of Scope emission category
This feature improves productivity by allowing businesses to post emissions or carbon credits even when unsure of the applicable emission scope, ensuring smoother operations and reducing bottlenecks.
Key Features and Benefits:
- Out of Scope Option: Allows posting of emissions without a specific scope by selecting “Out of Scope” in the Emission Scope field.
- Flexible Setup: You can assign sustainability account categories or create new accounts for emissions not tied to any scope.
- Streamlined Reporting: Entries marked as “Out of Scope” are recorded in sustainability ledger entries, ensuring they are tracked properly.
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This flexibility ensures that businesses can continue their sustainability reporting and operations without being delayed by uncertainty regarding emission scope classification.
Please be aware that some features mentioned in this release plan are still in development. Delivery timelines may shift, and certain functionalities might not be available as initially projected (see Microsoft policy).
