5 Most Common Pitfalls for Companies When Implementing CSRD

At SustainLab, we’ve been working closely with hundreds of companies as they gear up for CSRD. Through these experiences, we've seen a few common pitfalls that companies often encounter. By being aware of these issues early on, you can make the reporting process smoother and boost your sustainability efforts for the long haul.

1. Underestimating the Time Required
   Preparing for CSRD is like preparing for a marathon. You think you have plenty of time until you realize the race is just around the corner. Many companies do not fully grasp the mountain of work that CSRD reporting demands.
   
   

2. Assigning Responsibility to a Few Individuals
   Believing that one or a few individuals can read up on requirements, keep up with EFRAG updates, develop reporting models in Excel, collect data, and handle reporting is unrealistic. We discuss this often – the time we spend reading up and developing templates is substantial, and adding data collection and report completion is an impossible equation for one person. CSRD needs to be integrated across the whole organization, requiring efforts from many different levels.
   
   

3. Waiting for More Clarity and Therefore Postponing Work
   Many blame EFRAG for constantly releasing new updates, but this is only partly true. There is already a lot to go on, and waiting for a complete guidebook before starting will leave you waiting in vain. "Don't let the perfect be the enemy of the good," as the saying goes. It's essential to work iteratively, as updates will continue for years.
   
   

4. Delaying Data Collection Until DMA Completion
   Some companies believe they must wait to collect all data for CSRD until the double materiality analysis (DMA) is finalized. We think the opposite. The DMA is crucial for defining the scope of CSRD reporting and should be done as early as possible. However, DMA requires significant time and effort – time that can also be used for data collection and preparing the organization for what’s to come.
   
   

5. Focusing Solely on Compliance and Overlooking Business Benefits
   We know CSRD can be overwhelming, but compliance brings substantial business benefits. A robust sustainability program enhances attractiveness to investors, helps win more deals, and boosts employee satisfaction. Plus, it’s the right thing to do.

   
   

Final Tips to Secure Success

• Ensure Data Quality and Consistency
  Collect accurate and consistent data across different parts of your organization. Establish strong data governance practices to ensure reliable reporting.
  
  

• Engage Stakeholders Effectively
  Engage with internal and external stakeholders early in the process to identify key areas of focus and gather necessary data. Effective communication and collaboration are key to success.
  
  

• Invest in Training and Capacity Building
  Ensure that your team has the necessary skills and knowledge. Provide training and capacity-building initiatives to facilitate successful CSRD implementation.
  
  

• Leverage Technology for Efficiency
  Use ESG software and technology to streamline the reporting process, making it more efficient and accurate. Leverage digital tools to maximize your reporting capabilities.

  
  

Tackling CSRD can feel like a big job, but steering clear of these common pitfalls can put your organization on the right track. At SustainLab, we’re here to help with our CSRD module and expert advice. By spreading the responsibility across your organization, engaging your stakeholders, investing in training, and using the right technology, you’ll not only comply but also make meaningful progress in your sustainability journey.