10 CSRD tips for
ESG managers

The first glance at the requirements of the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) can set the pulse of sustainability managers racing. The CSRD may be challenging, but that’s no reason to panic! Here are 10 CSRD tips for you if you are dealing with the European reporting obligation for the first time.

CSRD tip 1: Clarify whether ESG regulations are affected

Get an overview of the CSRD and whether your company is affected and when you have to report for the first time. Clarify whether you are or will be affected by other ESG regulations. This is because these regulations may or must be covered or taken into account in the CSRD report. The EU Taxonomy, the German Supply Chain Act (LkSG) and the European Supply Chain Directive (CSDDD) are important in this context. An overview of the CSRD can be found in the CSRD factsheet.

CSRD tip 2: Take a closer look at the ESRS reporting standard

In order to understand the scope and requirements of the CSRD for your sustainability report, it is important that you have at least a rough overview of the framework, the ESRS. Don’t worry, you don’t have to read and understand all 1000+ data points: It’s best to take a look at the structure of the ESRS report here. And if you do want to take a closer look, you can download the original version of all ESRS standards from the EFRAG website.

CSRD tip 3: Link theory with practice

There are some companies that have published a CSRD report this year. You can learn from them and get a feel for what your report could look like. However, each company is so individual that you can’t follow one of these reports exactly. Each report has done different things well. But a spoiler first: the CSRD report will probably be closer to the financial report than most previous reports according to GRI or DNK. There is currently a lot of discussion about which direction the sustainability report will take. Here you can find a study by EFRAG on some initial reports.

CSRD tip 4: Understanding the double materiality methodology

The basis of the CSRD report is the dual materiality analysis. The materiality analysis has been around for some time, but the principle of dual materiality to identify sustainability issues relevant to reporting has only become mandatory with the CSRD. The ESRS prescribe a specific process for this, which must be documented. It is important to critically question: What is our knowledge and capacity for materiality analysis? Can we do this internally or do we need external help? Our experience shows: Bringing in external consultants is definitely helpful – if only to be able to draw on their experience when evaluating and selecting topics. No matter what you decide: We have outlined the process for the analysis here. You can also get a good overview of the method in EFRAG’s Implementation Guideline and in the DNK’s supporting documents.

CSRD tip 5: Create resources and expertise for the CSRD project

CSRD is a major challenge and not a one-off project. One sustainability manager alone is often not enough. Take a realistic look at the to-dos: What resources do we need for implementation? Are additional skills or training necessary? Do we need to hire someone? In the event that know-how is not enough, you are sure to find the right training course at the VERSO Academy.

CSRD tip 6: Plan the process in detail

There are some steps in CSRD reporting that require either a lot of time, a lot of coordination with internal stakeholders or both. It is therefore important that the process is realistic and forward-looking. You should also allow for buffers and plan a little more generously. You should keep the following milestones in mind:

• When do we want to publish the report?
• Are there any time constraints that we need to consider (vacations, other projects?)
• When do we write the report?
• Who needs to be involved in the process and when?
• When do we collect the data?
• When do we do the dual materiality analysis?
• When do we have to start?

CSRD tip 7: Determine contact persons

Reporting is a team effort: in addition to the sustainability managers, the implementation of CSRD requires the involvement of a wide range of departments within a company. Determine your contact persons from the teams at an early stage, get them on board and clarify responsibilities. We have summarized which teams are involved in CSRD, why and how in a graphic.

CSRD tip 8: Develop a process for data collection

You will need lots and lots of data for your CSRD-compliant sustainability report. This quickly raises the question: How do we collect the data? Establish a process that is as seamless as possible. And then: Where do we collect the data? Yes, this can be an Excel list, but experience has shown that this quickly becomes confusing. Our recommendation: use sustainability software for this.

CSRD tip 9: Take a strategic view of sustainability

The CSRD actively asks for a sustainability strategy – you need a concept for each individual key sustainability aspect. You also need to show how sustainability is anchored in the corporate strategy. Here are tips for developing a sustainability strategy.

CSRD tip 10: Don’t forget the supply chain

Although you can extend the transition period here, sooner or later you will need the data from the supply chain. And experience shows that you can’t achieve supply chain transparency overnight – it’s a longer process. Therefore: send out questionnaires now, carry out assessments and get an overview of the supply chain – preferably directly via a central tool such as the VERSO Supply Chain Hub.