As the European Union’s Corporate Social Responsibility Directive (CSRD) marks its first year of being implemented / enforced – and as compliance with it becomes mandatory for more firms, research reveals that over half of businesses are “risking non-compliance by failing to take key steps required.”
87% of firms say they have started collecting data for their inaugural CSRD report, but almost half (47%) have not yet conducted a “Double Materiality” assessment, despite this being “a key plank of CSRD preparations.”
An independent Censuswide study commissioned by Sweep in collaboration with global consultancy Capgemini Invent polled 500 sustainability leaders across the United States, UK, Germany and France to “understand the role of data in their sustainability strategies.”
At least 50,000 businesses based in the European Union and beyond will be required to comply “with the EU’s flagship sustainability legislation, which came into effect on January 1st 2024.”
Conducting a double materiality assessment is a mandatory first step, ensuring that businesses consider the “impact of their operations on both the environment and society – as well as on their own financial value.”
However data gaps and insufficient data management tools are “leaving many organizations open to compliance issues.”
Rachel Delacour, co-founder and CEO of Sweep, commented.
“This study shows just how far many organizations still have to go. As of now, too many businesses risk setting off on the wrong foot on their CSRD journey, which could lead to non-compliance, significant fines and reputational damage.”
Almost half (47%) of the sustainability leaders polled, “including those not subject to CSRD compliance, admit they are frustrated by the volume of sustainability data they are required to manage, and find it difficult to analyze.”
44% manage more than “10 different sources of emissions data, and a third (33%) spend more than 6 hours per week consolidating their data.”
Of those who have not yet started preparing for the CSRD, 41% put this down to a lack of a “whole business” approach to the issue, “40% cite the need for complex data manipulation, while 36% state that it is because of competing, confusing guidelines and frameworks.”
Spreadsheets remain the most commonly used tool for “sustainability data collection, adopted by 78% of businesses surveyed, with tracking software lagging behind at 73% uptake.”
Rachel Delacour added:
“This study shows just how far many organizations still have to go. For those organizations which go beyond seeing this as a tick box exercise for compliance, this is an opportunity to optimize your current operations, costs and supply chains, securing finance and investment, and creating positive business transformation”.