Navigating CSRD: Why Companies Must Act Now

In 2023, after talking to more than 100 EU sustainability managers about the Corporate Sustainability Reporting Directive (CSRD), it became clear that many companies are not fully prepared for what's coming. Let's break down two big misunderstandings that could impact how companies approach CSRD.?

Misunderstanding 1: Closest Deadline?

Getting Ready for 2026 Reporting?

Companies are gearing up for the CSRD's second wave, expecting a report in 2026 covering the year 2025. The catch? Companies need to be ready by the end of 2024, not 2026.?

The Materiality Assessment (MA) Challenge?

To report in 2026, companies need to know what data is crucial to track. This involves a Materiality Assessment (MA), a process often underestimated. It takes 3 to 9 months and involves understanding what matters to stakeholders, internal capabilities, and the company's context.?

Misunderstanding 2: Underestimating Time?

The MA Complexity?

The MA process is more than just ticking boxes. It's a complex journey involving stakeholders, internal capacities, and the unique context of each company. This process, from start to finish, can take anywhere from 3 to 9 months.?

The Need for Support?

If a company hasn't done an MA before, finding a partner to guide them is crucial. Selecting the right partner and starting the MA process can add an extra 2 months. In total, it might take 11 months.?

The Urgency Call?

Bridging the Gap?

Recognizing the time crunch, companies are advised to take a shortcut. A preliminary data gap analysis – essentially a first step in understanding what data is crucial – can save a lot of time.?

Strategic Moves?

The key is not to wait. Companies are encouraged to feel a sense of urgency and start planning. A preliminary data gap analysis and, if necessary, finding a partner for the MA process can kick off as early as February.?

Conclusion?

Getting ready for CSRD is not a distant task; it's happening now. Acknowledging the underestimated closest deadline and the time needed for the MA is vital. Companies are urged to act promptly, recognizing the urgency, and initiating strategic planning to ensure a smoother journey towards CSRD compliance.?

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