As an ESG officer, you face a significant challenge: preparing a CSRD-compliant annual report. While reporting on sustainability is not new, the CSRD has specific requirements that apply as of 2024. Tens of thousands of sustainability reports are published worldwide each year, but CSRD reporting requires a focused approach. In this article, we will help you create an effective report that not only meets the legal requirements, but also makes a real impact.
The four content pillars of reporting
The European Sustainability Reporting Standards (ESRS) prescribe what information you must report. Your report must cover four essential topics:
- General information tells the story of your ESG strategy and provides the foundation
- The environmental section covers your climate impact, carbon footprint and other ecological topics
- The social section highlights your impact on people – from working conditions to human rights
- The governance section shows how your organization secures sustainability in its operations
The structure of your CSRD reporting
When it comes to constructing your report, there are several effective ways to present the content. The choice depends on what best suits your organization and stakeholders. You can opt for a separate sustainability chapter, work with references and appendices, or fully integrate ESG throughout your report. In this, the CSRD thus offers your organization the freedom to choose what suits it best. ING, for example, opts for a concise summary in the main text, with detailed information in the appendices.
From data to compelling ESG story
Gathering the right information is just the beginning. The trick is to translate this data into a clear and compelling story that appeals to your stakeholders. This means not just presenting numbers, but also making the context and impact clear. Start by outlining your ESG ambitions and then show how specific initiatives and results contribute to them.
An effective ESG story connects your sustainability performance to your broader business strategy. Show how sustainable choices contribute to innovation, customer value and long-term growth. Arla Foods demonstrates this well in their report by directly linking their ESG performance to strategic goals and value creation.
Go for a qualitative and complete CSRD report
The credibility of your CSRD report hinges on the quality of your reporting. This requires a systematic approach at three levels. First, your data must be reliable and verifiable. Make sure you have a solid system of data collection and validation. Second, it is essential that you report on the topics that really matter. A solid materiality analysis helps you focus on what matters to your stakeholders and your business. Third, your reporting must be consistent – both internally and with previous reports.
KPN shows how to put this into practice. They substantiate their sustainability information with a comprehensive materiality analysis and make clear how they arrive at their choices. This gives stakeholders confidence in the completeness and reliability of the reporting.
Start preparing your CSRD report in a timely manner
An effective CSRD report does not emerge in the last few weeks before publication. It requires thorough preparation that ideally starts immediately after publication of the previous report. Develop a clear timeline in which you establish key milestones – from data collection to external review. Involve the right people from different departments from the beginning. Finance, HR, Operations and Communications all play an important role.
Also, invest in the right systems and processes. Make sure you can collect and validate data in a structured way. Train stakeholders so they know what is expected of them. Philips demonstrates the importance of this through their systematic approach to data collection and stakeholder engagement.
Make an impact with your publication
Publishing your report is a strategic moment to highlight your sustainable ambitions and achievements. This requires a thoughtful communication strategy that goes beyond simply uploading your report. Consider how best to reach different audiences. For example, internal stakeholders need different information than investors or customers.
Develop a mix of communication tools that reinforce your core messages. Translate complex data into understandable insights. Use visualizations to reveal trends and performance. More importantly, show how your ESG performance contributes to a more sustainable future for all stakeholders.
Want to know more?
Want more practical guidance on how to effectively prepare a CSRD report that makes an impact? In SDU’s whitepaper ‘The structure of your CSRD report’ you will find a comprehensive guide with concrete examples and tips. This white paper was developed in cooperation with Empact and can be downloaded here for free.
Want to spar about your specific situation? Contact our experienced consultants or read more about how we help ESG professionals like you prepare a perfect CSRD report.