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Preparing Your Data for
CSRD Reporting

What does CSRD reporting mean for your company, and how can you gather the right data to comply?

The Corporate Sustainability Reporting Directive (CSRD) is a legislative framework introduced by the European Union (EU) to elevate sustainability reporting standards. With its stringent requirements, the CSRD demands comprehensive environmental, social, and governance (ESG) disclosures. Below are some tips to enhance data collection to comply with this sweeping sustainability directive, particularly for companies operating internationally.

Understanding the CSRD

The CSRD mandates that large companies and listed small and medium-sized enterprises within the EU, as well as non-EU companies with significant EU operations, disclose ESG information according to the European Sustainability Reporting Standards (ESRS). The directive ultimately aims to improve the transparency, accountability, and comparability of sustainability information across the EU, and while non-EU enterprises have more time to comply, they should begin organizing their data this year to prepare for future reporting.

Affected enterprises include:

  • Companies generating over €150 million in annual revenue within the EU market
  • Companies with EU branches generating at least €40 million in net revenue
  • EU-based subsidiaries of non-EU parent companies that fall within requirements

Under the CSRD, companies must report on a broad spectrum of ESG factors and obtain third-party assurance of reported data to ensure accuracy and reliability, including:

  • Environmental Impact: Carbon emissions, energy usage, resource efficiency, climate change mitigation, waste management, and biodiversity
  • Social Factors: Workforce diversity, labor conditions, human rights practices, and community engagements
  • Governance: Corporate governance structures, anti-corruption measures, board diversity, and ethical business practices

Across the board, but particularly for international businesses, complying with the CSRD necessitates significant enhancements in data collection processes.

Enhancing Data Collection for CSRD Reporting Compliance

Effective ESG data collection is crucial for meeting the CSRD reporting requirements. Here are key steps companies can take to enhance their data collection processes:

  1. Conduct a Comprehensive Data Audit: Begin by conducting a thorough audit of your current data collection processes. Identify the types of data you need to collect, sources of this data, and any existing gaps in your organization’s chain of communications. This will provide a clear understanding of where improvements are needed and identify which metrics are material to your business.
  2. Implement Advanced Data Management Systems: Invest in advanced data management systems that can handle large volumes of ESG data. While many ESG reporting efforts can be adequately executed via spreadsheets, ideal systems should be capable of automating data integration from various sources, performing real-time analysis, and generating accurate reports.
  3. Standardize Data Collection Methods: Standardizing data collection methods across all business units and locations ensures consistency and accuracy. Develop clear guidelines and protocols for data entry, validation, and reporting. Use standardized templates and forms to capture data uniformly.
  4. Enhance Training and Capacity Building: Ensure that all relevant employees understand the importance of accurate data collection and are proficient in using data management systems. Conduct regular training sessions and workshops to build capacity and keep staff updated on the latest developments in ESG reporting.
  5. Collaborate with External Partners: Work closely with suppliers, partners, and third-party service providers to ensure they adhere to the same data collection standards. Establish clear communication channels and collaborate on data sharing and reporting practices to ensure consistency across the supply chain.
  6. Seek Third-Party Assurance: Engage accredited third-party auditors to verify the accuracy and reliability of your ESG data. Third-party assurance not only enhances the credibility and computability of your reports with the CSRD reporting framework but also helps identify areas for improvement on your ESG performance.

The CSRD represents a significant advancement in corporate sustainability reporting, setting high standards for transparency and accountability. The proactive approach outlined above sets up a path for gathering data to comply with CSRD and generally strengthens your organization’s reputation and stakeholder trust in an increasingly sustainability-driven market.

Learn more about APTIM’s sustainability solutions, informed by our own ESG journey.

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