Are you having difficulty navigating the EU Corporate Social Reporting Directive (CSRD)? With so many different elements to account for, it can be a challenge to make sure you’re doing everything you can to achieve compliance. That’s why we’ve spoken to our internal sustainability experts to give you the guidance you need to streamline the process!
Meet Helene Brodersen, Head of ESG and Sustainability at EcoOnline, and Neil MacRae, Product Manager of ESG and data intelligence at EcoOnline. Both have years’ worth of experience and insight in this field, making them the perfect pair to address this topic in a video interview.
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For those who may not know, what is the EU CSRD and how is this different from other sustainability frameworks?
Helene: “The CSRD isn’t a standalone directive. It’s a part of the EU Green Deal which you can think of as an umbrella which encompasses Sustainable Finance Disclosure Regulation or the SFDR, the CSRD, and subsequently the European Sustainability Reporting Standards (ESRS). These three elements help foster the sustainability movement in the European Union.”
Neil: “In terms of how the CSRD is different from other frameworks, the big difference here is the EU CSRD is the first real mandatory reporting framework. Sustainability reporting has existed for a while now, some of it being quite industry specific, some of it being restricted to certain geographies, but all of it being voluntary.
Organisations do this [sustainability reporting] on the basis that it may be expected by stakeholders or it's a good marketing or PR thing to do to show your customers and the world that you're behaving ethically and sustainably; however, this is the first real attempt to bridge the gap from voluntary reporting, which has always had maybe slightly dubious claims associated with it, to mandatory reporting.
There are lots of opportunities for things like greenwashing with voluntary reporting because you can cherry-pick what you put out there into the market to a certain degree, so the CSRD aims to make this mandatory reporting a little bit more comparable and a little bit more grounded in something which is more akin to financial style reporting.”
Helene: “Transparency is a keyword I’d like to add here. With the new regulatory requirements, companies are moving into a ‘glass house’ where everything is visible. Information that was previously kept internal—ranging from waste management to cybersecurity policies—must now be disclosed publicly. This level of transparency is daunting for many, as it exposes every aspect of the company’s operations to scrutiny. It’s not just about surviving in this new environment; it’s about thriving by leveraging transparency to build trust and demonstrate leadership.
Why should organisations embrace this framework instead of being scared? What are its benefits?
Helene: “It’s a new way of thinking about doing business and creating strategies. This reporting requirement makes it easier for stakeholders to compare, so it will be a benchmark opportunity where you’re comparing apples to apples. Even if you don't need to comply with the CSRD today, some of your customers will need to comply. They need to answer to different metrics that then affects you because you have to provide the data to them, so this is something everyone should embrace as soon as possible. As long as you make sure that everything in your glass house is ready to be audited then you have nothing to fear.”
Knowing all of this, how can organisations best prepare for the process of reporting to the CSRD?
Helene: “You need to understand your organisation’s risks and opportunities, as Neil mentioned. It’s a methodology called double materiality assessments. That’s definitely the first step. It provides you with a great overview of risks and data points you should prioritise and understand what your impact is inside out and outside in. Not to mention it’s a requirement under the CSRD.”
Neil: “With the CSRD and the intent of elevating this to the same level of financial style reporting, there has to be a much higher level of stakeholder buy-in within the organisation. So, the CFO 100% needs to be involved in the process and if they're not, they need to be. The report you put out there could be material to your share price if you’re listed and could have an impact on investor and financial access. There's a greater level of stakeholder engagement required across the organisation in order to get to a successful CSRD disclosure.”
Helene: “Yes, training and internal awareness are super important. Probably the most important place to start is to get this buy-in and awareness with the board and C-level or else you are just banging your head against the wall. I recommend not even using the term sustainability when speaking to them but the strategy for the organisation overall, so it’s not thought of as something additional. Talk about the risks you could face if you don’t report or comply and the potential loss of business. This is a matter of surviving as a company and as humans on the planet, not just simply ESG.”
There are over 1000 data points for organisations to choose from when reporting to the CSRD. Do organisations have to report on all of them and what tips can you give to narrow down the list?
Helene: “So the short answer is no, you don’t need to report on all of them, but there are some which are mandatory like ESRS 2 the ESRS E1 and S1, which pertain to climate change and your workforce.”
Neil: “The only other thing I'd add to this is around the transition rules for some of the data points as well. Don’t feel like if you uncover something particularly big as part of your materiality assessment that you haven’t really thought about before, you’ve got to go away and find that information immediately. You usually have a few years to go and collect good data for reporting. So, familiarise yourself with these transition rules and within your report mention that you’re working towards finding the appropriate data.”
What are some challenges you often see organisations face during this process and what advice can you give to others to overcome this?
Helene: “Poor data management and quality, getting everyone aboard and the right budget for this type of work.”
Neil: “I think there's an additional challenge as well. A lot of organisations think about CSRD as a bit of an accounting disclosure piece. Take energy consumption or CO2 emissions as an example. They state here is our energy consumption, here's how much it's coming from renewables and here's how much CO2 we're putting into the atmosphere.
But actually, there's quite a lot in the CSRD across the different standards around things like action plans and strategy. These are the sorts of things that you can work on almost independently of the data capture. Some companies complete the data collection all at once and then get to the end of the year and realise they’ve got to write an actual plan about disclosing how they’re going to achieve their targets or even what their targets are. Depending on what you deem material, 80% of the disclosure requirements can be those narrative qualitative type data points where you describe your plan, as opposed to just reporting the number. It’s not an accounting or numbers thing, but a business strategy.”
What are some ways organisations can best be supported by software?
Helene: “From my experience, it's impossible not to have a software tool that helps you collect all this data. Sometimes you don't have data or sometimes the quality is so poor that you need to do some calculations or you need to use different methods to find the results somehow. With software, you can also add in some automations and ping people so they can add information directly into the software, so it's also a great communication tool. Not to mention the reports and graphs which your C-level and board will be looking for.”
Neil: “I think we really have to call out auditability here as well as part of the disclosure process. You have to go through what they call limited assurance by a third party, and they’re going to expect to see some sort of management system. You've got to be able to demonstrate the source of all this information, where you've got it from and is it good quality data. An auditor has got to come in and see that you have got a handle on things. If you're working in spreadsheets, you might have a good answer, but you're probably not going to be able to show your workings and where this information comes from. Software is there to support you with this.
Whenever you send information, submit evidence, or change a data point, we can tell you exactly when that was changed, who's changed it, and how that maps to the relevant parts of the CSRD. So, it makes it a very neat experience for collating data for disclosure.”
Speaking of software, why should people choose EcoOnline to report to the CSRD?
Are there any trends that you see in the future of sustainability reporting?
Helene: "Scope 3 is going to shake things up in a big way. With new legislation like what we’ve seen in California, Scope 3 emissions are now firmly in the spotlight, adding value chain transparency into the equation. This growing focus on Scope 3 will force companies to rethink their entire business models. Traditionally, companies concentrated on Scope 1 and 2 emissions - those directly under their control or related to the energy they purchase. However, Scope 3, which encompasses all indirect emissions across the value chain, is often the largest part of a company’s carbon footprint.
This shift means decisions about materials, supplier choices, and product design are now directly tied to a company’s broader ESG narrative and reporting obligations. And while the CFO remains key in aligning sustainability strategies with financial goals, product and procurement teams are becoming equally vital. These teams are now at the forefront, making decisions that directly impact the company's sustainability journey.
Product teams need to innovate with sustainability in mind, from sourcing materials to considering the end-of-life impact of products. Procurement teams, meanwhile, must ensure that suppliers meet increasingly stringent sustainability criteria, often requiring new partnerships and long-term commitments.
The increased focus on Scope 3 is disruptive because it compels companies to rethink every aspect of their operations. Transparency is no longer optional—businesses now need to gather and analyse detailed data across their entire supply chain. This requires an unprecedented level of insight and collaboration, turning sustainability into a company-wide responsibility. The result is a new era of transparency, where we can finally unpack and understand all the data to pinpoint exactly where we need to make improvements."
Neil: "There's still lots of turbulence and turmoil around what is ESG and we should expect to see that continue over the next 5-10 years, while people start to find their footing around what good ESG actually is. The other side of this is we often think of CSRD as being something to report out against from a legal and mandatory standpoint; but even if you aren't legally required to report under CSRD, if you are a supplier of a large organisation, then you will be expected to supply some data to them and cascade through supply chains. We already see that happen as part of tenders and bids. Everybody needs to be ready for this."
Any final comments or words of wisdom to share with our readers?
And there you have it! Remember that power lies within your employees and organisation to make positive, sustainable change.
We want to help you along your journey with our sustainability software, described above by Neil. Our EU CSRD Module helps you collate all your data in one location, allowing you to get a complete insight into your sustainability status. Easily conduct your double materiality assessment to make more data-driven decisions towards your organisation’s strategy and goals, and speak with one of our internal experts to make sure you’re on the right track.
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