Sustainability Reporting: How is a CSRD Report Structured?

Time is ticking for companies to align with the Corporate Sustainability Reporting Directive (CSRD). Starting from January 2023, the new regulations will revolutionise how businesses report on sustainability, weaving it into the very core of corporate reporting.

With upcoming deadlines for large EU companies starting in 2025 and extended obligations reaching SMEs by 2027, preparedness is key. Discover essential insights on structuring your report to meet these deadlines and how embracing a unified approach can fortify your business's transparency, accountability, and sustainability focus.

The CSRD introduces a significant shift in corporate reporting by combining financial details with sustainability efforts into a single, unified report. This approach aims to provide a comprehensive view of a company's operations, underscoring the connection between economic performance and environmental responsibility. In embracing this integrated perspective, companies will be able to present a clearer and more detailed account of their overall health and impact on those invested in their progress.

In practice, the European Sustainability Reporting Standards (ESRS) outline a clear framework to follow to structure your CSRD report, compartmentalised into four substantive sections:

CSRD Report Structure

The ESRS report or sustainability statement is structured to include four key sections.

• An Overview of General Information, laying the groundwork and context of your operations.
• Details on Environmental matters, showcasing your company's ecological footprint and mitigation strategies.
• Insights into Social matters, reflecting on your impact on your own workforce, those along the value chain, affected communities and consumers.
• And, Governance matters, detailing the structures and policies governing your organisation.

The sector-agnostic or topical ESRS, covering Environmental, Social, and Governance (ESG) topics, are divided by governance; strategy; Impact, Risk and Opportunity management; and metrics and targets. Note that not all topical standards contain these four sections, it is the structure followed in the general sense and the one presented and followed by ESRS 2 General Disclosures. In the final report, these sections are followed by additional disclosure requirements from the sector-specific ESRS which will be published in 2026, and then the additional entity-specific disclosures.

For an in-depth guide on structuring these sections, Appendices D and F of ESRS 1 serve as practical references. Appendix D provides a simple overview of the structure of the ESRS sustainability statement and Appendix F (pictured above) breaks down an example of the structure within each ESRS, clarifying the undertaking in question deemed some ESRS as not material.

According to ESRS 1 Appendix F, within the report, all "General Disclosures" should be presented upfront in the opening chapter, with the caveat that disclosures addressing the material impacts, risks, and opportunities related to specific subjects (identified as SBM-3) are to be allocated to their relevant topical chapters. The information on each material topic needs to be segmented within its respective chapter to facilitate identification. Furthermore, a section dedicated to EU Taxonomy reporting is to be distinctly outlined within the Environmental section of the report, ensuring it stands out for ease of reference.

Optimising Your Approach for CSRD Reporting

Navigating the complexities of CSRD reporting demands a strategic approach, underscored by the adoption of digital tools to streamline the process. Starting with a comprehensive plan is crucial, from the initial gathering of data to the final report submission. The intricacies of CSRD reporting necessitate not just the expertise of sustainability reporting professionals but also the leverage of advanced digital solutions. These experts, armed with technological tools, can help avoid common pitfalls, ensuring reports are both comprehensive and compliant.

Transparency and Accountability in CSRD Reporting

CSRD reporting requires a clear and strategic method, especially when handling the complexities involved. Utilising digital tools will help to achieve transparency and accountability, as they help streamline every stage of the process, from data collection to report submission. This transparency is not just about clarity in reporting; it is also about traceability of the information provided. Clearly outlining each step will clarify the role and responsibilities of each stakeholder, as well as serve as a reference document throughout your compliance journey.

Fostering a Culture of Sustainability

The active engagement of leadership is crucial in nurturing a sustainable corporate culture. The expertise of sustainability professionals coupled with advanced digital tools, can guide companies to avoid common pitfalls in CSRD reporting. As leaders champion the adoption of sustainable practices, their commitment filters through the organisation, reinforcing the focus on long-term environmental and social goals. 

Leveraging Technology for Enhanced Reporting

Digital tools are invaluable for efficient data management, which is at the foundation of effective CSRD reporting. With the aid of automated systems and cloud-based platforms, companies can handle large volumes of data, from tracking energy use to monitoring supply chain emissions. This digital-first approach does not solely ease compliance but also boosts confidence among stakeholders. Investors and consumers, who increasingly value sustainability, can trust the consistent and reliable information that a well-managed CSRD reporting process provides.

Common Pitfalls of CSRD Reporting

In reporting for the CSRD, companies commonly stumble over several obstacles. The first major pitfall is dealing with a confusing mix of reporting requirements. These overlapping standards can lead to a high workload and make it difficult to devise an efficient plan of action. 

Companies also often face difficulties in keeping up with frequent regulatory updates, which can change the way they need to report their activities, struggling to keep track of all the detailed environmental and social information needed for these reports. This information must be correct and clear, as it forms the basis of trust in their reporting.

Gathering all the necessary data is the main hurdle for companies getting started on CSRD reporting. Ensuring this information is both complete and presentable is crucial for a transparent report. However, CSRD mandates companies to disclose more than 1,200 indicators, representing huge amounts of data. Setting up such data processes and storage is no easy task and should not be overlooked. 

Training the reporting team properly is also a common oversight. Without proper training, teams may not be equipped to manage the intricacies of CSRD reporting. Overcoming these pitfalls, will not only result in successful compliance with the law but also strengthen companies’ commitment to sustainable business practices.

Greenomy as your Ally for CSRD Reporting

Navigating CSRD compliance requires strategic expertise and advanced technology. Greenomy offers an end-to-end solution that not only simplifies the reporting process but also turns your sustainability data into actionable insights, propelling your business forward.

Our solution provides:

• Automated data collection for accuracy and efficiency.
• Real-time sustainability performance insights for strategic decision-making.
• Expert guidance through the complex CSRD landscape, ensuring compliance.

Let sustainability be more than a section in your annual report—make it a core part of your business strategy, corporate culture, and brand identity. Book a call and kickstart your CSRD reporting journey today.