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The introduction of the Corporate Sustainability Reporting Directive (CSRD) in the EU has increased the requirements for sustainability reporting. This requires careful planning and has a direct impact on reporting processes. Our current study looks at the requirements for companies to report non-financial information. The study shows the status of implementation in practice and addresses issues such as dual materiality, regulatory requirements, departmental responsibility, data quality and digitalisation in sustainability reporting. 

Various companies from different sectors were surveyed. 61 percent of the study participants are based in Germany, 34 percent in Austria and 5 percent in Switzerland. The survey mainly involved chief financial officers (CFOs) and heads of accounting (29 and 54 per cent respectively).

It also examines the types of reporting as well as experiences with the implementation of the EU Taxonomy Regulation and the auditing of sustainability reports by external experts.

Reporting on climate change most advanced

The EU has established a regulatory system for sustainability reporting to ensure that companies provide comparable information. These are increasingly attaching importance to comprehensive reporting that also includes sustainability aspects. The concept of dual materiality plays an important role in this. This refers to meaningful, "material" information for sustainability reports in accordance with the CSRD, which is always considered from two perspectives: on the one hand, the impact of business activities on the environment and climate (impact materiality) and, on the other hand, the impact of climate change on the company's own business activities (financial materiality).

Our survey shows that every third company surveyed stated that it is affected by negative impacts of climate change. In addition, one in four companies stated that they themselves have a negative impact on the climate. Accordingly, climate change is one of the most relevant sustainability aspects. Thus, with regard to climate change, 60 percent of the companies also stated that they had at least concrete plans for reporting. This was the highest value among the three aspects of the ESG topic.

Responsibility for sustainability reporting organised differently

The central responsibility for sustainability reporting lies in separate special departments at slightly less than every second company. This share is 12 percentage points higher for companies that are subject to the disclosure requirements according to the EU Taxonomy Regulation. Group accounting is involved in the reporting process in 48 percent of the companies and is the lead department in 29 percent of the companies. Furthermore, other corporate departments are relevant in this process.

Companies increasingly rely on digitalisation in sustainability reporting

With regard to the use of digital solutions, one third of the companies surveyed stated that they use more than 50 per cent digital systems and applications in the preparation of their sustainability reporting. Slightly more than half of the companies use less than 50 percent digital systems and applications and about one in ten companies rely on manual solutions. A digitisation level of more than 50 percent is more common among companies that are subject to disclosure obligations under the EU Taxonomy Regulation. This is also reflected in the comparison with the previous year: a larger proportion of companies estimate their level of digitisation to be more than 50 percent.

Further topics: Interviews with ESG professionals and case study of a medium-sized company

In the interview, Prof. Dr Johann Kranz, Professor of Digital Services and Sustainability at Ludwig Maximilian University in Munich, explains how companies can become more sustainable and why they should not hesitate to release information on their ESG KPIs and data. In another interview and case study, we shed light on ESG reporting from a behavioural steering perspective and use the case study of a medium-sized company to show how it has formalised its reporting process.

Jonathan Townend, Senior Vice President for Group Reporting & Taxes, reports on the experiences with the EU Taxonomy Regulation at the BMW Group.

As in previous years, the study was conducted in cooperation with Ludwig Maximilian University in Munich. 

Learn more about the results of the study and how companies can prepare for the increasing requirements in ESG reporting. Download now: