A PwC Luxembourg report has revealed that over half (55%) of companies preparing for compliance with the Corporate Sustainability Reporting Directive (CSRD) are struggling to maintain data quality and consistency.
The CSRD, a critical component of the European Green Deal, mandates transparent ESG (environmental, social, and governance) reporting, requiring firms to integrate sustainability into their operations and value creation strategies, according to ESG News.
Olivier Carré, deputy managing partner and technology leader at PwC Luxembourg, highlighted the importance of technology in overcoming these challenges.
Carré said, “The successful implementation of CSRD hinges on leveraging advanced technology solutions that can efficiently manage and integrate vast amounts of sustainability data. Companies must invest in robust data management and reporting systems to overcome these hurdles.”
The report outlines the significant resources companies are allocating to meet CSRD requirements. Nearly half (45%) of surveyed firms express concerns about having sufficient resources, with most expecting to dedicate 3-5 full-time employees (FTEs) to compliance projects.
Training has become a central focus, with 48% of FY2024 firms launching full-scale CSRD training programs and 37% implementing partial training initiatives.
PwC’s findings suggest a shift in how businesses perceive CSRD, with 50% of companies recognising it as a driver of strategic value creation.
In line with this, 58% of firms have incorporated non-financial KPIs into executive variable remuneration, while 29% plan to follow suit.
Michael Horvath, advisory partner and sustainability leader at PwC Luxembourg, stated, “The CSRD is the cornerstone enabling Europe to deliver on the European Green Deal. It puts sustainability at the core of companies’ business models, prompting them to integrate it into strategic decision-making processes.”
The report also highlights the growing role of technology in addressing CSRD requirements. More than 80% of respondents are adopting or planning technological upgrades to enhance data accuracy, facilitate real-time reporting, and ensure alignment with regulatory standards.
Leadership responsibilities for CSRD disclosures are also evolving. While CFOs and CEOs are leading efforts for FY2024, the involvement of chief sustainability officers (CSOs) is expected to rise to 22% by FY2025.
PwC’s analysis underscores the directive’s transformative impact on corporate sustainability. With a rigorous approach, CSRD elevates ESG metrics to the same importance as financial reporting, converting them into actionable insights for long-term growth.
