As companies around the world prepare their systems to comply with the EU’s Corporate Sustainability Reporting Directive (CSRD), PwC has published three action points to help them get set.

This advice appears in the firm’s first-ever Global CSRD Survey report, published last month (June 2024). Based on a poll of more than 500 senior executives and professionals, including finance, sustainability and risk leaders, the report uncovers patchy levels of preparation for the Directive, which will impact around 50,000 businesses.

For example, while almost two-thirds (63%) of companies say that they are either very or extremely confident that they will be ready to report on time, respondents cite data availability and quality (59%), value chain complexity (57%) and staff capacity (50%) as hindrances to a large, or very large, extent.

Good data, clear scopes and ‘Power trios’

In light of those and other findings, the report recommends three actions that business leaders should take to better enable CSRD readiness and a deeper integration between sustainability and strategy:

1) Move now to understand your scope, while recognising the progress you’ve made already

Although the CSRD is new, many companies have been disclosing sustainability data for years, under either regulatory or voluntary frameworks. To do that, they have carried out activities such as stakeholder engagement and materiality analysis, and set up processes, such as data collection, that they can leverage for CSRD.

Companies that have not completed upfront CSRD scoping should consider accelerating that work, so they can fully understand the challenge before them and make concrete plans. Plus, interacting with industry peers will help leaders see how others are approaching less-familiar aspects of the new standards, such as double materiality.

2) Set up your data processes and systems for the long haul

Relatively few respondents say that their companies keep sustainability data in central systems. However, savvy executives recognise that sustainability data must be available, accurate and audit ready not just on a one-time basis, but annually. As such, they are targeting investment on data and systems that are comparable to those they use in financial reporting.

3) Get your top executives involved

Leading companies are organising the CFO, CIO and CSO into a ‘power trio,’ responsible for CSRD implementation. With their teams’ support, CFOs bring knowledge of how the company manages data and makes decisions, CIOs direct the installation of enabling systems and software and CSOs provide expertise in sustainability and CSRD-specific procedures – such as double-materiality assessment. That combination is vital both for compliance and embedding sustainability into discussions around the company’s operations and business model.

Glaring shortfalls

Other figures from the report highlight larger gaps between executives’ sentiments around their companies’ readiness and work that remains to be done. That is particularly clear when factoring in the CSRD’s staggered reporting schedule. Businesses in the first wave of companies required to report are more confident in their readiness (72%) than the overall sample. However, less than half of those entities have completed key actions, such as confirmation of reporting options (39%), double-materiality assessment (38%) and validation of data availability (20%).

Only one-fifth of companies due to report in the 2025 financial year have validated the availability and completeness of data for their disclosures. Meanwhile, just under 60% of respondents have yet to involve their company’s technology function (although many are planning to do so) and the majority of businesses are not using specialist technology tools.

Indeed, spreadsheets emerged as the most commonly used preparation tool (74%), compared to just 26% using centralised sustainability data storage – ie, a ‘data lake.’ And only 20% of companies are using artificial intelligence to get ready.

Those issues aside, the survey highlighted some positives. More than three-quarters (76%) of companies believe that CSRD is prompting senior leaders to consider sustainability to a greater extent in their decision making, or will lead them to do so. Respondents also believe that CSRD will benefit their business to a large extent through improved environmental performance (51%), stakeholder engagement (49%), and risk mitigation (48%).

Global impact

In a statement, PwC Germany Global Reporting Leader Nadja Picard said: “As the countdown to CSRD compliance approaches, it is positive to see companies are largely confident that they will be ready to report. However, there is still some way to go, with the majority grappling with complex challenges, particularly the quantity and quality of data required, not only for their own operations but across their value chain.”

As CSRD essentially requires sustainability and financial reporting to be on a par, Picard pointed out, leading executives recognise that sustainability data must be available, accurate and audit ready on an annual basis. “The global impact of CSRD shows the importance of getting to a global baseline of reporting standards to reduce complexity and improve comparability,” she added.

PwC Partner Zubin Randeria, who leads the firm’s ESG business, highlighted the crucial role that finance professionals can play in their businesses’ preparations: “An accountant’s expertise is crucial for guiding companies towards CSRD readiness, ensuring transparent, accurate, and proportionate sustainability reporting that complies with regulatory standards and promotes action and sustainable growth.”

Further information

Visit ICAEW’s suite of resources on CSRD and read our thoughts on the relevant assurance challenges.