Are You Ready for CSRD Reporting?

The European Union's Corporate Sustainability Reporting Directive (CSRD) is transforming the business landscape because of its expansive scope. It’s currently a requirement for EU-owned companies. Ultimately, non-EU parent companies with substantial activity and a presence in the EU will be mandated to start reporting in 2029 along with those small and medium-sized enterprises (SMEs) listed on an EU-regulated market that avail themselves of the two-year opt-out option.* 

Although 2029 may seem a long time away, the CSRD reporting countdown for these entities starts now. Specific standards for non-EU companies will begin to be required in 2026, so it is imperative for businesses to commence preparations immediately to ensure compliance. Of the approximately 800 disclosures required, the data points that feed into these disclosures will require significant time to collect, analyze, and review.  To name a few, CSRD requires the following (often time-consuming) disclosure requirements:  

• A completed double materiality assessment that addresses value chain issues, which is complex as well as time-consuming
• Assurance requirements  

Aligning different business silos is essential to ensure timely access to required information, further extending the preparation time for reporting. The sooner businesses can do so, the more time they will have to identify and rectify any discrepancies in data gathering or reporting methods in advance of the reporting deadline. To help businesses plan, we’ve provided a roadmap with milestones to full compliance by 2029.  

2024: Laying the Groundwork

The first step towards CSRD compliance involves understanding its broad requirements. By the end of Fall 2024, companies should evaluate their current resources and practices and define a scope of work for CSRD compliance readiness.

To obtain the knowledge and skills for assessments, reporting strategy, and implementation plan in 2025, companies must either consider hiring external consultants through requests for proposals (RFPs) or develop internal expertise by posting job vacancies and arranging training for existing staff, ensuring readiness for the subsequent phases.

2025: Identifying Data and Formulating Strategy

The next step is to identify key reporting topics through a double materiality assessment that evaluates both financial impacts and societal implications. This phase should culminate in a detailed CSRD readiness assessment, and crafting a comprehensive reporting strategy and roadmap, which includes defining KPIs and mapping data sources. This is expected to take eight to ten months, underscoring the importance of early action. 

2026: Developing Processes and Building Systems for Data

With key metrics and data sources identified, businesses need to establish robust systems for data collection, verification, and compliance, including legal review. This phase is crucial for setting up processes for accurate data tracking and reporting, ensuring that all necessary procedures comply with CSRD's requirements, including third-party assurance, and enabling smooth operation during the actual reporting period.

2027: Collecting Data

Following this timeline, 2027 will be the first year companies will collect data to be included in their inaugural “dry run” CSRD report in 2028. The accuracy and completeness of the data collected will determine the quality of the report. During this time, continuous monitoring and adjustment of data collection processes will be necessary to address emerging challenges and ensure compliance.

2028: Producing a Preliminary Report

Even though the first CSRD-compliant report is due in 2029, producing a preliminary report one year in advance is advisable. This “dry run” will provide an opportunity to fine tune processes and obtain early feedback, positioning the business as a front runner in compliance and transparency. 

2029: Complying with the Regulation

This multi-year preparation approach will enable a smooth transition to mandatory CSRD reporting in 2029. After several years of meticulous preparation and strategy execution, companies will be poised to showcase their sustainability data with precision and adhere to the comprehensive criteria set forth by the CSRD.

The countdown to the 2029 CSRD compliance has begun. To navigate this significant regulatory shift successfully, businesses should act immediately to secure the necessary expertise, establish robust processes, and ensure comprehensive data readiness. Early preparation is not merely about compliance; it is a strategic maneuver that positions businesses for long-term success in a rapidly evolving global market. 

Ultimately, transparent and robust ESG reporting can bolster a company's reputation, attract investment, and strengthen stakeholder confidence. Act now, strategize effectively, and embrace the CSRD as an opportunity to affirm your dedication to a sustainable future for your company and the world.

* EU-incorporated companies that are already subject to the NFRD need to start reporting in 2025. Other large companies (including non-EU companies with listed securities on an EU-regulated market) and parents of large EU groups begin reporting in 2026. Other SMEs (except micro undertakings) listed on an EU regulated-market will have reports due in 2027 with an option to delay by two years. Non-EU companies with significant activity in the EU will be required to report in 2029. 

Sia Partners offers comprehensive support for organizations gearing up for CSRD compliance. Our services include ESG reporting, from initial assessments and strategy development to data collection and report generation. Leveraging our innovative AI-driven platform, SiaGPT, we provide cutting-edge solutions for information extraction and analysis, ensuring efficient and accurate CSRD reporting. With our tailored approach and deep understanding of regulatory requirements, we can help your organization not only meet CSRD standards, but also transform sustainability reporting into a strategic advantage.