Sustainability has long been an important topic within organizations, and initiatives are on the rise. Sometimes these arise from beliefs or obligations within the value chain, and increasingly due to market opportunities and attractiveness as an employer. It is therefore all the more remarkable that many organizations have only realized late that reporting on their sustainability or ESG efforts is becoming a legal requirement.
Priority
Complying with the European directive for sustainability reporting, or the Corporate Sustainability Reporting Directive (CSRD), will be mandatory for many companies in the Netherlands by 2025. If a company meets two of the set criteria (more than €40 million in revenue, more than €20 million in balance sheet total, more than 250 employees), there is no time to waste.
The CSRD is intended as a guideline for uniform and transparent sustainability reporting, where a set of standards and principles are established in the European Sustainability Reporting Standard (ESRS). These standards largely determine the topics that must be reported on and how this should be done.
On average, a company spends about 12-18 months setting up the organization, assessing materiality, documenting and accessing the necessary data, and compiling the report.
A Pragmatic and Data-Driven Approach
To make things easier for yourself, you could choose to deliver a report annually, because it is mandatory. However, the real value of the CSRD lies in the objectives that you set for your organization. For example, to create more transparency within your own value chain and to actually help build a better world.
This requires an approach that is repeatable and provides daily insights into the status of objectives and activities. An approach where being data-driven is essential to the management of the organization. Where systems are adjusted to capture data and are made accessible to be transformed into valuable insights.
It also calls for pragmatism, breaking the project into manageable steps and asking questions. Where to start? In what order? And at what level of detail? A global materiality assessment quickly provides insight into where attention should first be focused. Consider organizing the organization to ensure that ESG reporting is integrated into the organization and processes.
Accelerating with Data-Driven Technology and AI
We have entered ‘The Era of AI,’ an era in which many existing processes and services are being handed over to technology. This also applies to CSRD and other corporate reports.
In the context of this era, Macaw works with solutions from the Microsoft Cloud for Sustainability to assist customers with a data-driven approach to CSRD and sustainability transformation. For example, there is a governance module to track and monitor progress on each ESRS standard. And with the Sustainability Manager and the data solution, ESG OneLake, we automate the capture of all required data for the CSRD reports.
It’s Not Just About the Reporting
Ultimately, it’s not just about the reporting. It’s mainly a way to achieve transparency in the supply chain and make sustainability goals visible.
Technology also plays a role in achieving these goals – in both the primary and secondary processes of the organization. Set goals, for example, by defining a technology strategy with Macaw based on the ‘three horizons framework’. Based on this, initiatives are determined that successively contribute to achieving the organization’s sustainability goals.
Master data management
