Starting CSRD Data Collection: Before or After the Double Materiality Analysis?

One of the key takeaways from our recent meetings is the misconception many companies have about when to begin their CSRD (Corporate Sustainability Reporting Directive) data collection. Many believe that they must wait until the double materiality analysis (DMA) is completed.

However, we believe the opposite to be true, and here’s four reasons why:

1. Importance of Early Action
   
   

The DMA is crucial for defining the scope of CSRD reporting and should be conducted as early as possible. It helps in understanding the full range of Environmental, Social, and Governance (ESG) standards and disclosure requirements that will be included in your report. But this analysis is time-consuming, and waiting for it to be finalized can lead to unnecessary delays. Instead, this time can be effectively used for data collection and preparing your organization for the upcoming reporting requirements.

2. Knowing the Standards in Advance
   
   

While the DMA will eventually provide a comprehensive list of ESRS (European Sustainability Reporting Standards) and data points, we already know certain standards that will likely be included:

• ESRS 2 (cross-cutting): Mandatory for every CSRD reporting company.

• ESRS E1 (climate change): Not mandatory, but if considered non-material, it requires a detailed explanation in the sustainability statement, implying that most companies will include it.

• ESRS S1 (own workers): Also not mandatory, but it's challenging to argue that own workers are non-material.
  
  

Most companies will find it necessary to include these standards in their reporting scope.

3. Preparing for Data Collection
   
   

For companies new to sustainability reporting, it’s important not to underestimate the effort required to meet CSRD’s data reporting needs. For example, ESRS E1 necessitates reporting on total energy consumption and total scope 1, 2, and 3 emissions.

These Key Performance Indicators (KPIs) require a well-defined approach to calculation, including establishing boundaries, consolidating data, determining emission factors, and performing the necessary calculations.

4. Proactive Approach
   
   

Many of the companies we work with have adopted a proactive approach by initiating multiple processes simultaneously. This includes conducting the DMA and starting various work streams based on known requirements.

We believe companies that embrace this parallel approach are likely to be better prepared and experience less stress as the 2025 deadline approaches. But as always, we’d love to hear your thoughts and ideas so don't hesitate to contact us.


Insights shared by: Sofie Bergdahl, Customer Success Manager at SustainLab

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