
Fast-track CSRD compliance: Best practices on how to manage CSRD implementation
The report offers guidance for companies navigating the Corporate Sustainability Reporting Directive (CSRD). It emphasises the importance of double materiality, strategic planning, and organisational readiness. Key practices include gap analysis, leveraging existing infrastructures, and ensuring compliance to minimise risks and create value through effective sustainability reporting.
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OVERVIEW
CSRD requires a significant implementation effort, especially for companies based in or doing business in the European Union. Most businesses begin by addressing double materiality and conducting a disclosure gap analysis. This provides a foundation for the future data-gathering and reporting roadmap. However, the report warns that many companies are not fully prepared for the complex journey from identifying “what to disclose” to actual CSRD and EU Taxonomy reporting. Failure to properly understand and address these requirements can result in liability and compliance risks. In addition to compliance, the report suggests that companies can optimise their sustainability frameworks, turning them into value-creating mechanisms.
Team and organisational management
Effective team and organisational management is essential for successful CSRD implementation. The report recommends establishing a central Project Management Office (PMO) that reports to an ESG steering committee. Key functions such as finance, sustainability, legal, human resources, and procurement should be represented in the committee. Developing a resourcing plan that builds on existing roles is crucial for on-time delivery. Upskilling internal staff is often recommended due to difficulties in hiring new talent.
Clear internal reporting lines are essential, with finance, sustainability, or legal departments being responsible for board-level updates on progress. CSRD should not be seen as a one-off compliance task; rather, it offers an opportunity to increase the maturity of sustainability efforts, driving value beyond regulatory obligations. The report highlights that investor-focused communication via the EU Taxonomy disclosures could help maintain or lower the cost of capital.
Reporting infrastructure
The report advises companies to conduct a thorough analysis of their existing sustainability data flow and reporting systems. Developing a plan to meet short- and long-term disclosure needs is essential, and automation of data gathering is recommended to achieve limited assurance. Assigning specific topic owners for each ESRS (European Sustainability Reporting Standards) topic, such as climate change or resource use, is a key action.
In addition, the report stresses the importance of moving away from manual spreadsheets, which may seem cost-effective but carry high risks for errors. Tech-enabled reporting structures are necessary to ensure the accuracy and reliability of disclosures. Companies should also avoid attempting equal progress across all CSRD reporting gaps. Instead, they should prioritise material disclosure topics that will have the most impact on their sustainability goals.
Value creation
Transparent and accountable sustainability reporting builds stakeholder trust and enhances brand reputation. A baseline assessment of CSRD disclosure requirements, paired with quantitative analysis of financial impacts such as revenue growth and cost savings, can support decision-making. By projecting financial benefits from improvement actions, businesses can drive value creation while ensuring compliance.
The report warns against adopting short-term approaches, as doing so exposes companies to risks such as regulatory fines and reputational damage. Companies should also highlight unsustainable elements within their value chain as potential risks to support internal sustainability transformation efforts.
Recommendations
The report concludes with several recommendations for successful CSRD implementation. These include the need for strategic planning, the importance of building on existing infrastructures, and the significance of taking a long-term approach. Companies are encouraged to leverage the CSRD as more than just a compliance exercise and to use it to drive business value by creating a sustainable and transparent framework.