Your Guide to Navigating CSRD: 8 Key Questions Answered

As part of our CSRD and Sustainability Reporting course, Piotr Drozd, our main instructor, usually kicks things off with answers to the most common questions people have when getting started. So, we thought—why not share these insights with all of you? 😉

The European Financial Reporting Advisory Group (EFRAG) developed the European Sustainability Reporting Standards (ESRS), which have been adopted by the European Commission. EFRAG is now actively providing guidance on implementation, including areas like value chain and double materiality assessment. They are also working on sector-specific standards, which you'll find an overview of here.

There are 12 standards in total—two cross-cutting and ten topical. However, you won't need to report on all of them. A double materiality assessment will help identify which standards are relevant for your organization. Additionally, there are streamlined standards available for small and medium-sized enterprises (SMEs).

Quite a bit! Reporting covers four key areas: governance (how you manage impacts, risks, and opportunities, or "IROs"); strategy (how IROs relate to your business model); impact, risk, and opportunity management (the actions, policies, and resources you use to manage IROs); and metrics and targets (your sustainability performance and progress).

Yes, and no. While there are over 1,000 data points, many won’t be relevant to you—some may be omitted due to phase-ins, and others are voluntary. The most labor-intensive data collection will likely focus on E1 Climate and S1 Own Employees, but it’s simpler than it seems.

Let’s compare CSRD with two key standards: the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI). If you've been using GRI, you'll likely find that your current processes are largely aligned with CSRD, though there are some differences—particularly in how materiality is approached. GRI focuses on impact materiality, while CSRD introduces double materiality, covering both impact and financial risks. CSRD is also more detailed and comprehensive.

When it comes to ISSB, the situation differs. Reporting under CSRD typically meets ISSB’s requirements, but not necessarily the other way around, as ISSB emphasizes financial materiality only.

CSRD doesn’t require a separate sustainability report; instead, a sustainability statement should be included in a dedicated section of your management report. Here's an example from Ørsted, a Danish renewable energy company

Yes, your sustainability statement requires a limited assurance audit. While this is less comprehensive than the reasonable assurance required for financial statements, it still involves an external review process.

We don’t recommend specific software, tools like CodeGaia, Position Green and Upright Project are popular among our members. We also have a community-driven tool directory where users can leave honest reviews about software tools and service providers.

Want to dive deeper and ask more questions? Sign up for our course today!