The long-awaited change in corporate reporting has started. Since the beginning of the year, more than 250 companies have published sustainability reports under the EU’s Corporate Sustainability Reporting Directive (CSRD). Many more will follow, as companies in the EU disclose information about their greenhouse gas emissions, climate actions, employee working conditions, corporate governance, and more.
PwC reviewed the first 100 reports and found that many companies are still adapting to the new requirements. Report lengths varied from 30 to over 300 pages, and while some companies reported fewer than 15 sustainability impacts, risks and opportunities (IROs), others disclosed more than 80. Although some variation is normal depending on business complexity, these differences show that common reporting practices are still emerging. For now, comparing reports remains difficult for investors and stakeholders, but this is expected change as reporting maturity continues to grow.
At the same time, the rules are changing. In February, the European Commission proposed significant adjustments to the CSRD, aiming to simplify sustainability regulation and improve the competitiveness of EU companies. While timelines for reporting may change, the importance of sustainability reporting is here to stay. Here are some key takeaways:
- Adoption and scope of reporting
- Materiality assessment and presentation
- Focus areas and additional disclosures
- Climate and assurance
- Early stage of the journey
Adoption and scope of reporting
Almost 90% of the reviewed reports came from companies in five European countries, many of which reported voluntarily before CSRD was fully implemented.
Practical insight: Begin aligning reporting practices to CSRD requirements, even if not yet legally obliged, to anticipate future expectations and align to best practice.
Materiality assessment and presentation
While the approach to the double materiality assessment varied widely, many entities recognised the complexity and value behind the process itself. Most companies so far consulted mainly with internal stakeholders, few engaged external ones, and those reports with clear tables and structured formats were easier to navigate.
Practical insight: Set up a formal double materiality process and structure disclosures clearly to enhance report usability and transparency.
Focus areas and additional disclosures
Climate Change, Own Workforce, and Business Conduct were the most frequently reported topics, while Biodiversity and Water Resources were less often included. Some companies also reported entity-specific topics such as cybersecurity, AI and tax contribution.
Practical insight: Focus on what matters, particularly emissions reporting, employee metrics and governance matters. Beyond mandatory topics, assess whether additional sustainability issues are material for the company and ensure appropriate disclosure.
Climate and assurance
Climate Change was recognised as a material topic in almost all reports. Around three-quarters disclosed net zero targets and transition plans, though alignment with the Paris Agreement varied. Scope 3 emissions reporting showed significant differences by sector. Independent assurance activities, mostly at a limited level, are beginning to emerge.
Practical insight: Strengthen climate-related disclosures and prepare sustainability data early to support assurance requirements as they become standard.
Early stage of the journey
Companies are still developing internal systems and adjusting reporting practices to meet the requirements of CSRD. Best practices are only beginning to emerge, while regulatory frameworks continue to evolve.
Practical insight: Invest in building a long-term, adaptable sustainability reporting framework to respond effectively to regulatory and stakeholder changes.
How can we help?
Beyond supporting your existing or planned sustainability initiatives, our teams can assist your organisation in meeting reporting and strategic requirements. This could include support with identifying material sustainability issues, conducting carbon footprint assessments, reviewing ESG data and systems, obtaining ESG certification, delivering targeted ESG training and the assurance of such information.
In addition, we can help organisations align sustainability goals with business strategy, leverage data analytics to monitor progress, and develop effective ESG approaches. If you are interested in exploring these opportunities, please reach out to our dedicated teams.
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