Most companies are confident about reporting under the EU’s Corporate Sustainability Reporting Directive (CSRD), but their underuse of technology means that data is an obstacle, according to a new report from PwC.
The report, Global CSRD Survey 2024, found that 97% of companies are confident they will be ready to report under the CSRD this financial year, but underuse of integrated systems to improve data reporting processes could slow implementation.
PwC surveyed 547 executives and senior professionals across more than 30 countries and territories in April and May.
Technology is not being used to reduce complexity, the report noted, and many companies are not yet investing in the systems needed to manage environmental, social, and governance (ESG) data.
Few companies use specialised tools for sustainability reporting; 74% of companies currently use spreadsheets for data processing, compared with only 32% using integrated resource planning systems (ERP), 26% using centralised data storage systems, and 20% using artificial intelligence.
“Although most respondents plan to involve the technology function, less than 60% have already done so,” the report said. “Targeted technology investment, building on existing cloud and ERP foundations, is ultimately the only way to achieve efficient ongoing reporting and feed sustainability data into decision-making processes across the enterprise.”
Respondents also cited data availability/quality (59%), value-chain complexity (57%), staff capacity (50%), and timeframe/deadlines (47%) as significant implementation barriers.
While data is an obstacle that companies continue to grapple with, respondents see value in sustainability reporting. About one-third of respondents expect CSRD implementation to lead directly to revenue growth and cost savings, the report said.
Respondents also said reporting under the CSRD will improve their environmental performance (51%). They also believe reporting under the directive will improve engagement with stakeholders (49%) and help them mitigate risks (48%).
Those who have already started reporting under the directive this year are even more convinced that environmental performance (57%), engagement with stakeholders (52%), and risk mitigation (51%) will benefit from CSRD implementation.
The cross-functional demands of CSRD reporting will challenge companies, but “savvy executives recognise that sustainability information, too, must be available, accurate, and audit-ready: not just on a one-time basis, but annually”, the report said. “They are making investments in data and systems comparable to the ones they use in financial reporting.”
Resources
- A new e-learning course from AICPA & CIMA, together as the Association of International Certified Professional Accountants, and PwC provides ESG upskilling resources to help finance and accounting professionals meet the requirements of EU standards. The course is available globally.
- Jeremy Osborn, FCMA, CGMA, Ph.D., AICPA & CIMA’s global head of ESG, will advise on how to navigate the CSRD requirements, with other experts, on 17 July. Register here to join the session.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.