Guide
CSRD is sold as a reporting exercise, but the real work is scope, data and assurance. Here is what getting ready actually involves, in plain terms.
By Christopher Fagan, Managing Partner
The first question is the simplest and the most often got wrong: does CSRD apply to your business, and from when. The scope has shifted, and many companies are either preparing for an obligation they do not have yet or ignoring one that is coming. Settle this before spending a penny on readiness.
CSRD turns on double materiality, the assessment of both how sustainability issues affect your business and how your business affects the world. This is the foundation that decides what you actually have to report, so a credible, evidenced assessment comes first, not a reporting template.
Most CSRD pain is a data problem. The numbers you need are spread across systems, suppliers and spreadsheets, and they were never collected to an audit standard. Getting the data sources, definitions and controls right is the real work, and it is where readiness is won or lost.
CSRD reporting will be assured, so the evidence has to stand up to scrutiny rather than be reconstructed at year end. Capture the trail as you go, with clear ownership, so the report is defensible when someone checks it.
The organisations that cope best treat CSRD as a programme with owners, systems and controls, not a report the finance team writes once a year. That is what turns a compliance burden into something that runs quietly in the background.
At PEF we help organisations get CSRD ready in a way that holds up to scrutiny. See our ESG and compliance service and our free CSRD checker.
CSRD stands for the Corporate Sustainability Reporting Directive, the EU law that requires companies in scope to report on sustainability matters using the European Sustainability Reporting Standards, with the report subject to assurance.
Under the finalised Omnibus position, a company is in scope only if it has more than 1,000 employees and more than €450 million of net turnover. Groups based outside the EU are caught if they generate more than €450 million of turnover in the EU and have a qualifying EU subsidiary or branch.
Companies in scope report against the European Sustainability Reporting Standards on the topics shown to be material by a double materiality assessment, in a sustainability statement within the management report, with limited assurance from an auditor or assurance provider.
For some organisations yes, for others the timing or scope has changed. The first step is to establish clearly whether and when it applies to you, because that has moved.
It is assessing both how sustainability issues affect your business and how your business affects people and the environment. It decides what you actually have to report under CSRD.
Mostly a data job. The hard part is sourcing reliable, audit ready data across systems and suppliers, which is why readiness should start with the data, not the disclosure.
Yes, assurance is part of the regime, so the evidence behind the numbers has to stand up to independent scrutiny rather than be assembled at the last minute.