Many growth companies are covered by the Corporate Sustainability Reporting Directive

The EU's Corporate Sustainability Reporting Directive (CSRD) brings smaller companies within the scope of statutory sustainability reporting. The first companies covered by the Directive will report new sustainability information starting from fiscal year 2024, but most companies will be covered by the CSRD from fiscal year 2025 onwards. 

The CSRD applies directly to companies that meet 2/3 of the following thresholds:
a turnover of at least €50 million, a balance sheet of €25 million and 250 employees. 

The aim of the Directive is to improve the quality and reliability of sustainability reporting. The European Sustainability Reporting Standards (ESRS) under the Directive contain more than 1,000 data points, from which companies use a double materiality analysis to identify those that are relevant to them.

Sustainability data is published as part of the Board of Directors' report in the company's annual financial statement. The process also includes a mandatory limited assurance of the sustainability data, usually performed by the company's audit firm. 

In Finland, the implementation of the regulation is supervised by the Financial Supervisory Authority and the PRH. Ultimately, the responsibility for high-quality financial and sustainability reporting lies with the company's top management.

Many companies start their preparation by conducting a double materiality assessment to identify the most relevant sustainability issues and data points to report. Typically, this is followed by a maturity assessment, which examines the adequacy of the company's current reporting in relation to the new requirements.

CSRD reporting requires a lot of quantitative data collection, as well as describing various risk management and governance processes. Typically, this information is sought from different functions or even value chains. All data to be reported must be verifiable, and a digital XLBR tag is added to each data point.

In practice, sustainability reporting requires training and change management within the organisation. To support the reporting work itself, it may be worth considering digital solutions to help with project coordination, data collection, or evidence capture. 

KPMG has over one hundred ESG professionals in Finland, approximately forty of whom work directly in the sustainable business consulting team. For our audit clients, we offer services specifically related to CSRD assurance. 

For non-audit clients, we can provide a wide range of support for various sustainability management and reporting projects. Currently, ESG & Tech projects are particularly popular, where we help companies to select and implement the appropriate reporting technology. Our team can also support on substantive matters such as EU taxonomy, human rights management, climate change, biodiversity, or the circular economy.