Karomia : Simplifying ESG Reporting With Technology

Karomia sells software that writes corporate sustainability reports automatically. Companies facing Europe’s Corporate Sustainability Reporting Directive upload existing documents, and the Ghent-based startup’s artificial intelligence extracts data, maps it to regulatory requirements, and generates compliance-ready reports in hours instead of months. The company claims 90% workload reduction and 100% auditor acceptance among clients. Founded in 2024 by Jens Verhiest, Luc Machiels, and Simon Hiel, Karomia raised €2 million last February from Entourage, imec.istart Future Fund, and imec.istart Fund. The company has signed over 60 clients across Europe and the United States, including consulting firms like PwC and Mobius that deploy the technology for advisory work. Nine employees operate from Ghent’s Wintercircus building.

European regulations will force approximately 50,000 companies to produce sustainability disclosures covering carbon emissions, labor practices, and board diversity. Most companies already track this information but don’t know where it lives or how to organize it into the 1,400 data points regulators demand. The AI finds the data, structures it, and produces the report. A manufacturing company needing its first CSRD report traditionally hires consultants who spend months conducting gap analysis, interviewing department heads, and gathering data from disparate systems. The process costs hundreds of thousands of euros and diverts internal resources. With Karomia, sustainability teams upload whatever documentation exists. Environmental permits contain emissions data. HR policies document labor practices. Board minutes show governance structures. Annual reports include financial linkages to sustainability initiatives.

The AI scans files, extracts information, matches data points to European Sustainability Reporting Standards requirements, identifies gaps, and generates draft reports aligned with CSRD mandates or the Voluntary Standard for SMEs. Every claim links directly to source documents. If the report states 15% year-over-year emissions reduction, clicking that figure shows exactly which filing provided the number. This traceability matters because external auditors must verify sustainability disclosures like financial statements. The platform flags gaps automatically. If CSRD requires water consumption disclosure and uploaded documents lack that data, the sustainability team learns precisely what’s missing. This upfront identification lets companies address deficiencies systematically rather than discovering holes during audits. Stefan Sallinger at consultancy Agio used the platform for CSRD reporting at Aluminium Duffel and said its transparency and efficiency saved ESG managers significant time.

The technology handles double materiality assessment, one of CSRD’s most complex requirements. Regulators require companies to evaluate both how sustainability issues affect financial performance and how operations impact the environment and society. The AI incorporates scientific benchmarks and industry standards to automate this analysis. Regulatory requirements keep changing. When the European Commission proposed the Omnibus simplification package last February, suggesting CSRD should only apply to companies with over 1,000 employees, the platform updated its compliance engine within days. The EU Parliament approved the Omnibus delay in April, postponing Wave 2 reporting from 2026 to 2028 and scoping out Wave 3 listed SMEs entirely. Wave 1 companies that began reporting last year continue their obligations. Non-EU companies with substantial EU operations still report in 2029 for the 2028 financial year. Final Omnibus terms were agreed in December with the European Parliament approving increased employee thresholds to 1,000 workers and €450 million revenue requirements for Wave 4 non-EU companies.

Karomia supports both mandatory CSRD reporting and the Voluntary Standard for non-listed SMEs. VSME covers smaller companies below €25 million in assets, €50 million in revenue, or 250 employees. Even companies not legally required to report face pressure from banks and investors demanding sustainability data. The software gives mid-market firms a way to produce credible disclosures without hiring Big Four consultants. The company moved aggressively on partnerships. Last May, the startup integrated its VSME engine with Kube, a platform built by Isabel Group and Belgian banking federation Febelfin for secure ESG data exchange between SMEs and financial institutions. Belgian companies generate VSME reports through the platform and share verified sustainability data directly with lenders through Kube’s infrastructure. Banks increasingly require ESG disclosures as lending criteria. Another partnership with Carbon+Alt+Delete connects carbon accounting to regulatory reporting. Companies measure emissions and the platform converts carbon data into compliant VSME and ESRS reports automatically.

Simon Hiel, the company’s chief technology officer, says clients discover they possess more relevant data than expected. A logistics company might think it has minimal environmental reporting capability until the AI extracts fuel consumption from fleet management systems, identifies route optimization that reduced emissions in operational reports, and finds supplier sustainability requirements in procurement policies. The information exists, but companies haven’t organized it through a regulatory lens. The company differentiates by automating report generation from unstructured documents rather than requiring manual data entry into structured databases across hundreds of fields. This approach eliminates extensive training requirements and reduces dependency on external consultants for ongoing compliance.

CSRD implementation is phasing in over the next two years. Companies under the old Non-Financial Reporting Directive began reporting last year. Large firms and listed SMEs were scheduled to start this year, but Omnibus delayed them to 2028. Non-EU parent companies with significant European operations report in 2029. Early preparation matters because last-minute compliance creates compressed timelines, higher consultant costs, and greater audit failure risk. Karomia’s client base has grown from initial pilot customers to over 60 companies within its first year of operation. The February funding round supports platform development, market expansion, and team growth as regulatory deadlines approach.

For ESG analysts, Karomia-generated reports provide standardized ESRS structures that facilitate peer comparison. Complete source traceability enables efficient claim verification during due diligence processes. The automated gap identification helps analysts assess disclosure completeness early in review cycles. The platform reduces the administrative burden on sustainability teams, allowing companies to allocate more resources toward implementing actual sustainability improvements rather than managing reporting processes. This shift from compliance paperwork to operational focus represents a core value proposition for the company’s target market.

Karomia’s development roadmap extends beyond compliance automation into sustainability strategy tools. The company plans to add features that help organizations set performance targets, track progress against goals, and benchmark against industry peers. Future releases will incorporate expanded data analytics capabilities and integration with additional carbon accounting and environmental management systems. The goal is positioning Karomia as comprehensive ESG infrastructure rather than single-purpose reporting software. With regulatory mandates expanding globally and stakeholder pressure for transparency intensifying, the company sees sustained demand for automated compliance solutions that reduce costs while maintaining audit quality.