CSRD Implementation: Challenges & Opportunity

Over the past few weeks, I’ve been speaking with sustainability leaders across Europe, and one thing is clear: CSRD is taking up far more time and resources than they anticipated. Teams that were once focused on strategic projects are now spending up to 70% of their time grappling with the requirements of this new reporting framework.

The concept of double materiality has proven particularly challenging. The added perspective on how a company's activities impact the environment and society is expanding the scope of data collection and analysis. One practice leader from a leading management consulting firm shared that this is also exposing teams that have been working in silos, highlighting the need for better integration across departments.

Another sustainability lead for a financial services firm noted that?the possibility of receiving a qualified audit report is creating additional pressure. More time is being spent on ensuring every detail is accurate. CapEx reporting requirements mean management can no longer just throw a number out there for their sustainability targets. They need to show exactly how much capital is being earmarked to meet these goals, pushing for more accountability.?

The Head of Sustainability for a European bank mentioned the difficulty in obtaining energy certifications in parts of Eastern Europe, where limited service providers and higher costs add to the burden. CSRD is pushing teams to gather information from across their portfolios, often in areas where data was previously scarce or non-existent.

But perhaps there is a silver lining. As one Chief Sustainability Officer pointed out, CSRD could be a game-changer in differentiating companies that are truly committed to sustainability. The level of detail and context required in these reports will help investors channel capital towards the real sustainability champions. Teams that invest in building robust systems and collaborative processes will experience smoother reporting cycles in the future. So, while they are feeling the CSRD pinch now, it could lead to a more transparent and sustainable business landscape.

How is your team handling the challenges of CSRD? I’d love to hear your thoughts and experiences in the comments below.