Year one – Adapting to new standards
As the first year of the implementation period of the Corporate Sustainability Reporting Directive (CSRD), we learned that a significant number of companies are taking proactive steps to align their sustainability reporting with these new standards. However, the journey towards full compliance is marked by varying levels of familiarity and interest in specific reporting tools and frameworks.
Preparation for CSRD Compliance
A substantial 78% of the respondents have initiated the preparation of their sustainability reports to ensure alignment with the CSRD requirements.
This proactive approach underscores the growing recognition of the importance of sustainability reporting and the need to adhere to stringent regulatory standards. Companies are increasingly aware that comprehensive and transparent sustainability reports are not just regulatory obligations but also vital for building trust with stakeholders, enhancing corporate reputation, and ensuring long-term business sustainability.
Familiarity with the ESRS XBRL Taxonomy
Despite the high rate of preparation, there is a noticeable gap in the understanding of the European Sustainability Reporting Standards (ESRS) XBRL taxonomy. Only 52% of respondents stated that they are familiar with this taxonomy and its implications for the reporting process under the CSRD directive. The ESRS XBRL taxonomy is a critical tool designed to standardise sustainability data reporting, ensuring consistency, comparability, and transparency across reports. The lack of familiarity among nearly half of the organisations indicates a need for more education and resources to help companies understand and implement this taxonomy effectively.
Interest in Voluntary Tagging with ESRS XBRL
Interestingly, there is a significant interest in adopting the ESRS XBRL taxonomy for sustainability reporting, even if the mandatory tagging will be postponed. Around 31% of those who took part in the survey express interest in voluntarily tagging their 2024 annual report using the ESRS XBRL taxonomy. This interest reflects a forward-thinking approach, where companies recognize the long-term benefits of early adoption of standardised reporting practices. Voluntary adoption of the ESRS XBRL taxonomy can position these organisations as leaders in sustainability reporting, potentially offering them competitive advantages and enhanced credibility. It will also give companies a trial year to work on fine-tuning processes and cooperation. CSRD requires sustainability and finance teams to work together to produce an integrated report with XBRL tagging, which is not an easy task.
Interest in Cross-Sector Forums
To further support the transition towards effective CSRD compliance, 25% of the respondents are interested in participating in cross-sector forums with experts to discuss the reporting implications of the CSRD. Such forums can provide valuable opportunities for knowledge sharing, collaboration, and the development of best practices. Engaging with experts and peers can help companies navigate the complexities of the CSRD requirements, enhance their reporting processes, and address common challenges and something that we will investigate further going forward.
Moving Forward
The journey towards full CSRD compliance is well underway for many of our users, with a clear trend towards proactive preparation. However, the significant gaps in familiarity with the taxonomy highlight the need for increased educational efforts and resources. The interest in cross-sector forums also indicates a willingness among organisations to collaborate and learn from each other to achieve more effective and compliant sustainability reporting.
As companies continue to navigate the evolving landscape of sustainability reporting, staying informed, engaging with experts, and adopting best practices will be crucial. The collective efforts of companies, regulators, and industry experts will play a vital role in shaping a more sustainable and transparent future. CtrlPrint ensures compliance in today’s and tomorrow’s complex regulatory landscape, without compromising the ability to tell a compelling story. As corporate reporting becomes more complex, involving a larger pool of experts and requiring multi-user and functional collaboration, CtrlPrint supports seamless content creation in a secure platform.
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