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An investor once told me that good sustainability reporting is like an MRI. It’s not a lot of fun, but once it’s done, you get a detailed picture of how the company is working (or isn’t) and how its moving parts are interacting (or aren’t). Thorough disclosures can show you, for example, where your workforce is exposed to climate risk, where emissions are concentrated along your supply chain, where energy consumption has been curbed, and how governance and processes support good decision-making (or don’t).
But here’s the thing: rigorous sustainability reporting—the kind that encompasses not just past progress but also future impacts and business planning—is more than just a tool for locating sources of pain. Done right, it’s a road map for long-term growth and value-creation. That’s one of the principal messages emerging from PwC’s Global CSRD Survey 2024, which polled senior business leaders about how they’re responding to the EU’s Corporate Sustainability Reporting Directive. The regulation, which affects both EU-based businesses and non-EU entities with significant activity in the bloc, will ultimately require disclosures from some 50,000 companies worldwide.
Make no mistake: complying with the CSRD’s provisions will be hard. The standards identify 1,144 individual data points across multiple topic areas, some of which haven’t typically been priorities for most companies. It’s a reality reflected in the chart below, which shows that respondents have less confidence in their ability to address topics like biodiversity and ecosystem loss than they have for topics like workforce and business conduct.
Overall, I’m encouraged that confidence levels are high. So is optimism. Take a look at this next chart, which shows that a considerable share of business leaders see the upsides of implementing CSRD disclosures.
As you might expect, executives are most likely to anticipate benefits already commonly associated with corporate sustainability efforts: an improved environmental record, better standing with stakeholders, stronger resilience against climate risks, and so on. What’s most interesting to me is how many respondents anticipate upsides that have to do with financial performance—particularly cost savings and revenue growth.
This tells me that some business leaders are breaking out of a compliance mindset in favour of one focused on value creation. More broadly, it suggests that, for a growing number of companies, a clear business case for sustainability action is coming into view. There’s emerging data to back up the optimism, with recent PwC analysis establishing a connection between certain climate-related actions and higher profit margins and revenue growth.
None of these benefits will come easy, but my own work with companies grappling with reporting challenges sheds light on some key moves that leaders can make to clear hurdles from the road ahead.
Get beyond the spreadsheet. Three-quarters of respondents are still relying on spreadsheets for sustainability reporting. This shows that many businesses aren’t prepared for collecting and managing the kind of investor-grade, granular and auditable data that CSRD provisions call for. Doing so can require significant investment in technologies such as enterprise resource planning (ERP) systems, sustainability management software, centralised data storage, and AI. Look, I know making the case for these kinds of expenditures is hard if you’re still working out what data to collect, from where and how frequently, but it’s important to start planning for such investments now.
Topple silos. Sustainability teams can’t go it alone, and increasingly, they’re not. A solid majority of survey respondents say their company has also enlisted finance, operations, tech, investor relations and other business functions in CSRD implementation work. This kind of cross-functional collaboration is crucial to creating the company-wide buy-in needed for investment in next-level reporting. Equally key: fluid communication and data sharing between functions—so that the worker in receiving isn’t sending receipts upstairs just to procurement when those filings could be equally useful to sustainability teams tracking how extreme weather is affecting supply chain reliability.
Remember that you’re probably not starting from scratch. Your company may already have some robust sustainability disclosures in place—voluntary or otherwise—and may have conducted materiality assessments. Those activities can support the critical process of scoping your CSRD implementation. They can also serve as a useful starting point for building the data and analytical capabilities needed for disclosures on less-familiar sustainability topics such as biodiversity and circular business models.
Did I mention that it won’t be easy? I know I sound like a broken record, but that’s because the difficulty of CSRD implementation is, in a way, the point. These disclosures aren’t meant to be items that get scratched off a compliance to-do list in the span of a few months or even a couple of years. They’re meant to spur long-term changes in your business. The companies that acknowledge this fact now stand to become the outperformers in a sustainable future.
Explore the full findings of PwC’s Global CSRD Survey 2024
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