83% of Companies Say Collecting Accurate Data for CSRD Reporting Requirements will be a Challenge: Workiva Survey
More than 4 out of 5 professionals involved in corporate reporting say that collecting accurate data to comply with the EU’s Corporate Sustainability Reporting Directive (CSRD) will be a challenge, yet most companies plan to align their reporting with the new regulation, even if they don’t need to, according to a new survey released by business data and reporting solutions provider Workiva.
For the study, Workiva’s third annual 2024 ESG Practitioner Survey, Workiva commissioned a survey of more than 2,200 professionals involved in ESG reporting across North America, Europe, and Asia-Pacific, including executives and finance and accounting, sustainability, internal audit, legal, and compliance professionals at companies with at least 250 employees and $250 million in annual recurring revenue.
The survey found that the while the vast majority, 98%, of respondents are confident in the accuracy of their ESG data, the evolving regulatory landscape will increase pressure on companies, with 87% reporting that they will find it challenging to adapt reporting processes to comply with new regulations, and 83% indicating that collecting accurate data to meet the CSRD requirements will be a challenge for their organizations.
The CSRD, which began applying to some companies as of the beginning of 2024, will significantly expand the number of companies required to provide sustainability disclosures to over 50,000 from around 12,000 currently, and introduce more detailed reporting requirements on company impacts on the environment, human rights and social standards and sustainability-related risk.
Across nearly all disciplines, the professionals reported complying with new regulatory mandates as their top ESG reporting concern, with the volume of requirements as their top compliance return, with other key challenges reported including complying with multiple global standards and measuring qualitative initiatives and specific data points.
Despite the anticipated challenges in meeting the new regulatory sustainability reporting requirements, 81% of respondents that are not required to comply with the CSRD reported that they plan to partially or fully align their sustainability disclosures with the new regulation anyway, including 86% of respondents in North America, and 72% in the UK.
Among the reasons suggested by the study of companies’ plans to meet the challenging CSRD reporting requirements were the widespread perception of benefits that can be derived from improved ESG reporting. 88% of respondents, for example, agreed that having a strong ESG reporting system will give their organizations a competitive advantage, and 84% agreed that integrated financial and sustainability data enables better decision-making that can improve a company’s financial performance. Similarly, 88% said that integrated financial and ESG reporting will have a positive impact on long-term value creation.
The study also indicated that the professionals anticipate that the assurance requirements of the new regulations will help improve accountability and performance, with 88% reporting that obtaining assurance over ESG data will increase the likelihood of a company achieving its goals.
Paul Volpe, Senior Vice President of Growth Solutions at Workiva, said:
“Assured integrated reporting is about more than compliance, it is a necessity for demonstrating performance and value in a competitive landscape. Business leaders and their teams understand this is a transformational opportunity that demands serious commitment and they are preparing to invest in reporting that is integrated across business lines, accessible to all stakeholders, and powered by innovation.”
