Around 50,000 companies in the EU are facing new requirements in sustainability reporting due to the application of the Corporate Sustainability Reporting Directive (CSRD). But are the companies already ready for the new requirements? And if not, where is there a need for action? We checked this for the white paper "A new level of ESG reporting" using the CSRD Readiness Assessment Tool developed by KPMG.
The European Sustainability Reporting Standards (ESRS) form the framework for ESG reporting according to the CSRD. Using publicly available reports such as annual, sustainability and CDP (Carbon Disclosure Project) reports, our experts assessed the extent to which more than 200 global companies from various industries are prepared for the disclosure requirements of the ESRS.
CSRD Readiness: Analysis of the status quo of over 200 selected global companies
The CSRD Readiness Assessment Tool provides a high-level assessment of the CSRD readiness of individual companies. In the study, the results of these assessments are presented in the form of a traffic light code, where the colour red indicates that requirements have not yet been met for the most part.
In the white paper, readers will find an analysis of the status quo, which can also serve as a needs analysis for companies. The CSRD readiness of the following sectors was examined separately:
- Energy, raw materials and chemicals
- Consumer goods and retail
- Manufacturing industry
- Automotive industry
- Banking and insurance
- Life Sciences and Healthcare
- Asset Management
- Private Equity
Overall, it is apparent that a large proportion of companies do not yet fulfil the CSRD requirements: There are yellow traffic lights indicating conditional compliance - but not a single green traffic light indicating issues where the CSRD requirements have already been met. In an international comparison, the detailed reporting of German companies in the area of social aspects in the management of impacts, opportunities and risks on their own workforce is very positive. This is particularly true for statements on education and training, gender equality in top management as well as participation and inclusion.
In the white paper, we explain how the CSRD Readiness Assessment Tool can help to make the transition to CSRD-compliant sustainability reporting efficient.
Large companies should urgently prepare for the CSRD, which is to be applied in a staggered manner from 1 January 2024. They should assess which of the requirements are material to their business and develop comprehensive plans for collecting and disclosing relevant information. The applicable principle of so-called double materiality must be observed. This means that in addition to the effects of one's own activities on people and the environment ("Impact"), it must also be determined how external sustainability aspects affect the economic situation of the company ("Risk & Opportunities"). As soon as an aspect is assessed as material from at least one of the two perspectives, corresponding reporting is required.
Partner, Audit, Head of Accounting & Process Advisory
KPMG AG Wirtschaftsprüfungsgesellschaft