Insights from the first 100 CSRD reports

A long-awaited revolution in corporate reporting is upon us. Since the turn of the year, more than 250 companies have published sustainability reports under the EU’s Corporate Sustainability Reporting Directive (CSRD). Hundreds more will follow as companies based and/or listed in the EU disclose information about their greenhouse gas (GHG) emissions, climate adaptation and mitigation efforts, employee working conditions, corporate governance, and more.

Based on a review of the first 100 published reports, it’s clear that many companies are still coming to grips with the new reporting regime. The reports we reviewed ranged from 30 pages to more than 300. Some companies reported on fewer than 15 sustainability-related impacts, risks and opportunities (IROs). Others disclosed more than 80.  

While some variation is to be expected—depending on the scope and complexity of the underlying business—these differences also underline that sustainability reporting best practices will take time to emerge. Until then, investors and other stakeholders trying to compare reports will face a sometimes frustrating task.

The rules themselves are also in flux. In February, the European Commission proposed significant changes to the CSRD as part of an Omnibus package of measures aimed at simplifying sustainability regulation and boosting the competitiveness of EU companies.  

Against this background, here are our observations from the first batch of CSRD reports.

Voluntary reporting

Of the 100 reports we reviewed, nearly 90% are from companies in five European countries, three of which (Germany, Spain and the Netherlands) have not yet transposed the CSRD into law. In other words, the companies in these countries were not under a legal obligation to report under the CSRD but have chosen to do so—motivated, in part, by stakeholder demands for better sustainability reporting.

This is a reminder that the CSRD’s objective is not reporting for its own sake. The goal is to help companies and their stakeholders understand more clearly the interplay between sustainability and value creation. 

Double materiality assessment

At the heart of CSRD reporting is the process through which companies identify material IROs in relation to sustainability matters that should be included in the report, then map material IROs to a list of topics and sub-topics laid out in reporting standards. We saw a high degree of variability in how companies carried out the double materiality assessment—and how much they disclosed about the process. 

For example, while almost all companies said they engaged with internal stakeholders, many said little about whether or how they engaged with external stakeholders. Similarly, some explained why the materiality assessment resulted in certain topics being omitted from the sustainability report. Many others did not. Although reporting standards do not require this type of explanation (except in relation to the Climate Change standard), it can be useful context for readers.

Impacts, risks and opportunities

About half of the reports we reviewed covered between 20 and 50 IROs. As noted above, however, there was a wide spread on either side of this range. We also saw a wide variety of approaches to how IROs are presented, making it harder to compare reports. As we discovered during our review, clear tables laying out material topics, sub-topics and associated IROs are supremely helpful for readers.

It’s hard to say more about IROs at this early stage. Additional reports and deeper analysis are needed before we can start to draw conclusions about how companies within and across sectors view the material sustainability–related impacts, risks and opportunities facing the business. More to come on this.  

Material topics

From the list of sustainability topics and sub-topics prescribed by the reporting standard, those most frequently included were: Climate Change (climate mitigation, climate adaptation and energy), Own Workforce (typically with a focus on employee working conditions), and Business Conduct (covering everything from corporate culture to supplier relationships and whistleblower protections). 

The least common topics were Affected Communities, Water and Marine Resources, and Biodiversity and Ecosystems. This is in line with the results of our PwC Global CSRD Survey 2024, in which we asked executives globally about the topics likely to be in scope for their company.

If companies identify material impacts, risks, or opportunities not sufficiently covered by the reporting standard, they are required to make ‘entity-specific’ disclosures. In the reports we reviewed, the most common disclosures in this category were related to data governance, cybersecurity and AI. A few companies included information about their total tax contribution. 

Climate change 

In the reports we reviewed, only two companies did not include Climate Change as a material topic. Among the overwhelming majority that did, about three-quarters disclosed a net zero target and slightly more discussed their transition plan. These targets may or may not be aligned with the Paris Agreement. 

On Scope 3 emissions (that is, emissions across the value chain), on average companies disclosed information relating to about half of the 15 categories in the reporting standard. The most frequently disclosed categories so far are purchased goods and services and business travel—although this varies enormously by industry.   

Independent assurance

The CSRD asks for independent assurance of sustainability reports, starting at a limited assurance level. Some companies have gone further by opting for reasonable assurance (a step up from the limited level) over a subset of KPIs or information—for example, relating to GHG emissions or workforce metrics. One company opted for reasonable assurance over the full sustainability report. 

Also worth noting, in reports published so far are a very small number of qualified conclusions and some Emphasis of Matter, Other Matter, and Inherent Limitation paragraphs. Assurance practitioners are drawing attention to uncertainties related to the double materiality assessment process, high levels of measurement uncertainty on certain quantitative metrics, and difficulties comparing sustainability information between entities and over time.

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In sum, the first wave of CSRD reports is a reminder that while we are now on our way towards more robust and uniform sustainability reporting within the EU, the journey has barely begun. Companies are still building systems and capabilities. Best practices are only now emerging. The reporting rules may yet change in important respects. Still, the journey has begun—and while progress won’t be smooth or linear from here, there’s no turning back.