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With the increasing number of sustainability-related directives and (mandatory) frameworks to comply with, the field of reporting is gradually changing as well. Traditional sustainability reporting has largely consisted of Excel spreadsheets managed by a small number of employees at individual companies. Emission factors were often hard to obtain, reporting took a lot of manual effort, and data was largely static with few means of checking it for consistency. Due to a lack of harmonization in reporting requirements on an international level, the comparability of reports across companies was limited. Currently, with the emergence of highly complex reporting frameworks such as the CSRD, Excel seems to no longer be fit for ensuring compliance. This is primarily due to a lack of digital data tagging (a key requirement of the CSRD is to use the European Single Electronic Format – ESEF for presentation of reports), which is important considering the sheer volume of data to report on. Additionally, mandatory external auditing, dynamic data management, and global comparability of sustainability reports require systems that are more comprehensive and streamlined, and enable automation and sharing of data among many stakeholders. The notable growth of ESG software-as-a-service (SaaS) companies reflects the market needs for such

The Corporate Sustainability Reporting Directive (#CSRD) encompasses a wide range of disclosure requirements. As first reports will be due in 2025 for financial year 2024, let us have a look at a key concept underpinning the legislation! 🚦 📍#DoubleMateriality is a concept central to the CSRD and the introduced binding reporting standards, the European Sustainability Reporting Standards (ESRS). It refers to the notion that the company activities affect the social and environmental matters, but these sustainability matters in turn also affect the company. Thus, the double materiality is split into impact materiality and financial materiality. #ImpactMateriality concerns activities which generate short or long-term, positive or negative, and active or potential impacts on the environment 🌱 and people. This is clearly connected to the Environment, Social and Governance (ESG) framework of classifying sustainability issues, as seen also in the CSRD with the proposed topical standards (the defined areas of sustainability). For example, calculating the environmental footprint of your organisation with respect to greenhouse gas emissions would fall under impact materiality. #FinancialMateriality focuses on the risks and opportunities created by sustainability issues. For example, if climate change is expected to result in diminishing stocks crucial to your supply chain, or if violations

CS…SRD… CSR-what? You have probably heard of this acronym within the last two years, especially if you work in accounting, sustainability, or management positions. The Corporate Sustainability Reporting Directive (CSRD) refers to the EU legislation which was first proposed in 2021 and entered into force in January 2023. It is no longer sufficient to assess the companies’ performance based solely on the financial information – environmental and social impacts are of great importance as well due to concerns for climate change and fair labour practices . The CSRD aims to strengthen the sustainability (social and environmental) reporting, which will increase the availability of sustainability data on par with financial information. Improvements in the transparency of companies’ sustainability performance are seen as greatly demanded by investors, consumers, and other stakeholders, and pursuing a common framework enables comparison.   Furthermore, the CSRD is a regulatory driver for a transition to a sustainable economy, which encourages circular and low carbon business practices through the double materiality principle, which we will cover in our  next post .   Who does the CSRD apply to? The first CSRD reports will be required in 2025 (for financial year 2024) for large undertakings already subject to the Non-Financial Reporting