With the EU’s first Corporate Sustainability Reporting Directive (CSRD) reports due in January 2025, the countdown is on to complete and publish. Many companies are working across all teams and levels, including the board of directors, to comply.

While companies recognise the significance of the new reporting requirements, teams are facing hurdles as they prepare. Overcoming such challenges surrounding compliance has created a new demand for assured integrated reporting systems.

What is CSRD?

CSRD is a directive that has been in effect in the EU since January 2024. It requires many companies operating in the bloc to disclose information on their environmental, social and governance (ESG) metrics alongside the financial data, and with assurance. It has been designed to standardise and increase the quality and reliability of the information companies provide to investors and stakeholders, making it a crucial directive reaching beyond just the EU.

The CSRD represents a significant milestone, requiring companies to disclose more information and raising ESG metrics to the same level of importance as financial ones.

Overall, companies and boards are recognising the significance of the additional transparency and accountability that the reporting requirements entail.

In fact, according to our independent survey of global professionals involved in ESG reporting, the majority (81%) of companies that are not subject to the CSRD still indicate plans to comply. This is indicative of the significance of CSRD reporting beyond regulatory requirements.

Similarly, 88% of institutional investors said they would be more likely to invest in companies that integrate financial and ESG data. Clearly, there is a demand for greater transparency and disclosure on financial and environmental risks and opportunities.

Adapting to new CSRD standards

While the CSRD heralds a more sustainable future for many businesses, it also introduces challenges when it comes to compliance. Most (83%) ESG practitioners agree that collecting accurate data to fulfil the CSRD requirements is challenging for their organisation; many are concerned by the short timelines and extensive reporting requirements.

Generally, issues arise around organisations not knowing what to report, how to collect the required data, and how to effectively report it. More preparer-focused guidance could assist here, since companies should be aware of reliefs that are already present within the European Sustainability Reporting Standards (ESRS). However, some just do not have the resources in their teams to conduct all the work, while others lack confidence in sorting through the abundance of data and understanding what and where to improve.

Boosting efficiency and collaboration

Sustainability will always require expert teams. Nevertheless, in a short-staffed sector, most companies will discover they need to invest in solutions that remove the process obstacles involved with reporting compliance.

A key obstacle is that some organisations are trying to use their existing tools and processes. However, legacy tools lack the automation or connectivity required for today’s environment or the efficiency improvements that would reduce that feeling of excessive reporting. Point solutions—or products that tackle individual aspects of the reporting process—often lead to manual workarounds that lack scalability and are susceptible to human error.

The best technology simplifies collaboration across the diverse teams responsible for gathering, summarising, analysing and reporting sustainability information via multiple channels. Streamlining these processes is paramount in ensuring consistency and comparability across reporting.

Using an automated reporting process can enhance cross-disciplinary communications and collaborations between reporting departments to bring the required expertise to the task, and make the audit easier to review because the source of the data is known and visible.

The right tools control and enhance trust in the process, ensuring confidence in the final reported insights. They automate to provide consistency, give crucial time back to teams, and are appropriately agile to prepare organisations for whatever comes next.

A more sustainable landscape

The CSRD is the gold standard when it comes to sustainability reporting and, ultimately, complying with regulations like this is a new reality of the modern business world.

Discerning board members, leaders and their teams know this is a transformational opportunity that demands serious commitment, and they are prepared to invest in reporting that is integrated across business lines, accessible to all stakeholders and powered by innovation.

Beyond mere compliance, it is essential for demonstrating performance and value in a competitive landscape. At such a pivotal moment in ESG reporting, implementing assured integrated reporting systems paves the way for long-term success.

Andie Wood is vice president for regulatory strategy at software-as-a-service provider Workiva