From Regulatory Pressure to Strategic Clarity
With the introduction of the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS), sustainability reporting has entered a new phase. For many organizations, however, this transition is accompanied by uncertainty:
What exactly needs to be measured?
Which data is mandatory today, and which expectations are often overstated?
In practice, the challenge is less about willingness and more about prioritization, data maturity, and strategic sequencing. Understanding what is required now—and what is not—has become a critical management task.
CSRD and ESRS: A Necessary Distinction
A common source of confusion lies in the way CSRD and ESRS are perceived as a single, monolithic obligation.
CSRD defines who must report, when, and under which governance framework.
ESRS defines what should be reported and how information should be structured.
Importantly, ESRS does not imply that all sustainability topics must be measured with the same level of depth from day one. The standards are designed to be applied proportionally, based on relevance and materiality.
What Companies Really Need to Measure Now
From a practical and strategic perspective, three priorities stand out.
1. A Robust Double Materiality Assessment
The double materiality analysis is the foundation of CSRD-compliant reporting. It determines:
which sustainability topics are material from a financial perspective, and
which have a significant impact on people and the environment.
Without a structured materiality assessment, detailed data collection lacks direction. The emphasis at this stage is not perfection, but methodological clarity, transparency, and documentation.
2. Baseline Emissions and Clear Methodology
For climate-related disclosures, companies are expected to establish:
a credible emissions baseline, and
a consistent calculation methodology.
This does not require fully granular, real-time data across all operations and value chains. What matters more is that assumptions, emission factors, and boundaries are clearly defined and consistently applied.
In other words:
Consistency and traceability outweigh data volume.
3. Governance, Processes, and Controls
CSRD is not only about numbers. It also requires companies to demonstrate:
how sustainability data is generated,
who is responsible for it,
and how quality and plausibility are ensured.
Clear internal responsibilities, review processes, and escalation mechanisms are already considered a strong indicator of reporting maturity—even if some data points remain incomplete.
What Is Often Overestimated (and Not Required Yet)
While expectations around CSRD are high, several assumptions frequently go beyond what is currently required.
Full Scope 3 Coverage from the Start
Scope 3 emissions are undeniably important, but ESRS explicitly acknowledges the challenges related to data availability and supplier engagement.
Companies are not expected to deliver:
complete primary data across all upstream and downstream activities,
or perfect accuracy in the initial reporting cycles.
What is expected is a structured approach, transparency about data gaps, and a plan for gradual improvement.
Perfect Data and Automated Systems
Another misconception is that CSRD requires fully automated, real-time sustainability platforms from the outset.
In reality:
early-stage reporting often relies on a combination of systems, estimates, and manual inputs,
provided that data quality checks and documentation are in place.
Digitalization is an enabler—not a prerequisite on day one.
Data Quality Over Data Quantity
One of the most critical lessons emerging from early CSRD implementation is that poor-quality data creates more risk than missing data.
Inconsistent methodologies, undocumented assumptions, or unexplained changes between reporting periods can undermine credibility and audit readiness.
High-quality sustainability data is:
consistent over time,
traceable to its source,
and explainable to both internal and external stakeholders.
This shift—from collecting more data to managing better data—marks a fundamental change in sustainability management.
From Reporting Obligation to Management Instrument
While CSRD is often perceived as a compliance burden, its long-term relevance lies elsewhere.
When emissions and sustainability indicators are:
structured,
comparable,
and decision-ready,
they evolve from reporting outputs into management inputs.
Organizations that treat CSRD purely as a reporting exercise risk missing its strategic value. Those that embed sustainability data into planning, procurement, and investment decisions gain a clearer view of risks, efficiencies, and opportunities.
The Role of Digital Sustainability Infrastructure
As reporting requirements evolve, scalability becomes essential.
Digital sustainability systems are not primarily about automation, but about:
maintaining methodological consistency,
managing growing data volumes,
and enabling cross-functional collaboration.
They support the transition from fragmented reporting to integrated sustainability management—especially as regulatory expectations expand over time.
Conclusion: CSRD as a Starting Point, Not the Finish Line
CSRD and ESRS do not demand immediate perfection. They demand structure, transparency, and intent.
For companies, the key questions are no longer:
“Can we report everything today?”
but rather:
“Do we understand what matters most?”
“Is our data approach credible and defensible?”
“Are we building a foundation that can evolve?”
Those who approach CSRD with this mindset will not only meet regulatory expectations—but also strengthen their ability to manage sustainability strategically in an increasingly data-driven environment.
