EU’s new Corporate Sustainability Reporting Directive (CSRD) requires the first group of regulated companies – 11,000 or so large EU companies already reporting under the existing Non-Financial Reporting Directive (NFRD) – to report on 2024 data in reports published in 2025. Assurance of sustainability information will be required as well. But are companies ready for the reporting or assurance mandate? Probably not, according to this recent article from Responsible Investor:
“How prepared then is the market to assure the coming tide of disclosures? ‘Not fully prepared, to put it mildly,’ according to Wim Bartels, a senior partner at Deloitte… Questions and uncertainties abound when it comes to the CSRD. This is partly due to its unprecedented depth and breadth, both in terms of disclosures and who discloses, but also to a lack of clarity on how it will be implemented… ‘There is very, very little time to prepare,’ says Hilde Blomme, deputy chief executive at Accountancy Europe…”
Companies frequently engage auditors to assist in preparing for new audit/assurance requirements, but that may not be possible in this case. Companies may have to do more themselves:
“The lack of maturity in the market means companies must be their ‘own assurers for a while in many ways, [Carmen Lu, counsel at New York City law firm Wachtell, Lipton, Rosen & Katz] adds. Companies should focus on making sure that they have the right internal processes and procedures in place, [she] says. ‘You should not rely on your assurer to catch your mistakes'”.
A follow up blog tomorrow will cover even more concerns for companies concerning capabilities and availability of auditors to conduct CSRD assurance. The bottom line – as we have said over and over – companies should already be preparing for reporting. If you aren’t sure where to start, our checklist 7 Things You Need to Know About the EU’s CSRD is a good place to start, along with other member resources on individual elements of reporting.
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