Learnings from the first CSRD-compliant sustainability statements
On 29 May 2025, Business in the Community Ireland hosted a workshop for its member companies to analyse and gain insights into a selection of sustainability statements compliant with the Corporate Sustainability Reporting Directive (CSRD) published earlier this year. The session brought together 25 member companies, affirming that sustainability reporting is a top priority for their business, with a vision of transparency and informed decision-making, and demonstrating a real willingness to share and learn from their peers, as they do throughout the year at the CSRD peer support series facilitated by BITCI advisers.
In the current period of regulatory uncertainty, during which a revision of European Sustainability Reporting Standards (ESRS) and associated disclosure requirements is underway, we focused our attention on disciplines that are valid and valuable for all businesses, whether or not they are subject to compliance with the directive. Double materiality (DMA), assessment of impacts risks and opportunities (IROs), engagement with stakeholders and value chain mapping are all exercises that forge a good understanding of the company’s business model, its interactions with its environment and meet the fundamental requirements of a solid management system. These are not entirely new areas, but areas where the CSRD has set in stone good practices and disclosure.
Workshop participants, including sustainability practitioners and report preparers, were able to gain insight into how these topics were approached and how this differs from their own approach, the methodologies used, and information disclosed by their peers, as well as what the findings of the different sections tell us about the company.
Presentation, visuals and narrative information
When browsing these reports, our gaze naturally focuses first on the visuals, the presentation and methods used to ease reading. It’s clear that making these demanding sustainability statements reader-friendly is easier said than done, but the great variety of reports offers good examples of presentation in the various sections (DMA, IROs, …). The structure of the reports, following the ESRS, is considered to be more consistent than with other frameworks.
There is a happy medium to be found between providing the reader with enough information to usefully understand the company and, on the contrary, being too detailed and risking drowning the outcome with too much contextualisation and explanations of the methodology. The best reports are set up as stories and the reader can follow threads. A sustainability report is primarily narrative. To develop this storytelling, it’s important to clarify the importance of the topics and how the strategy integrates and addresses them. The rest will follow.
Another learning that all practitioners agreed on that morning concerns the usefulness and necessity of references in the report to direct the reader to other sections where additional information can be found, for the sake of conciseness and to facilitate reading and navigation of the document. Some repetition is inevitable, as most users consult reports looking for specific information, reading parts of them independently. Therefore, an introduction and context-setting for each section is still necessary, but the use of a precise referencing system seems to be the most appropriate way to provide additional details and is a sensible way for limiting such repetition to what is strictly necessary.
This was observed, for example, in the Glenveagh’s 2024 Annual Report, where all material impacts, risks and opportunities (IROs) and their interaction with strategy and the business model are presented in concise tables, with a succinct description of each IRO and a clickable reference to another section of the document offering more detailed explanation.
Double materiality & impacts, risks and opportunities
As expected, reports show a variety of DMA methodologies. Indeed, no single process would be suitable for all types of business models, organisational structures, location of operations or value chains of all undertakings applying the ESRS. There’s no one-size-fits-all solution, and according to EFRAG’s recommendations, whatever process is used must reflect the undertaking’s facts and circumstances. The amount and the definition of IROs also differs, even within one same sector. This makes comparison and benchmarking complicated.
Based on the sustainability statements discussed, it appears that companies have identified fewer positive impacts and opportunities than negative impacts and risks. This is confirmed by a wider review of 250 reports undertaken by PwC Global, What businesses are disclosing under the CSRD | PwC.
A visual representation of the materiality results helps to see the extent to which there is overlap between impact materiality and financial materiality, and which sustainability matters would not have been material without the impact lens or the financial lens. It was also interesting to read details about non-material IROs, and how companies were planning to approach them or review their materiality in the future.
Describing in detail all material IROs and visually mapping them to the value chain has been recognised as good practice and presents benefits for both external readers and internal use. Carlsberg or Ørsted’s Annual Reports are good examples of such value chain mapping, with a good overview of where the impact originates, how it impacts, the time horizon and how the company is addressing it.
Finally, much discussion focused on where to draw the line in terms of transparency about methodology and internal processes, details provided on how IROs were identified and assessed, scoring thresholds, as well as practical experience, always trying to balance usefulness with conciseness and assurance requirements. Greater consistency can be expected in the years to come while companies get more confident with the exercise.
Stakeholder engagement & value chain mapping
Stakeholder engagement allows companies to use stakeholder insights to shape their strategy and reflect a real-world footprint. All workshop participants agreed that CSRD had helped stakeholder engagement become more structured and focused.
For sustainability reporting and materiality assessments, the ESRS do not mandate a specific stakeholder engagement method and instead encourage leveraging existing processes and tools. Some businesses have adopted a meaningful method for materiality assessment purposes by engaging directly with internal and external stakeholders, based on their expertise or experience with the topics, to verify the outcome of their DMA during the validation process.
In terms of disclosure and presentation of stakeholder engagement practices, good examples were discussed. They provide details of the stakeholder groups with which the company is in ongoing engagement, the purpose behind engaging with each stakeholder type, the engagement methods and channels, key insights and priority topics that emerged, outcomes from engagement and how it ties up with the organisation’s strategy and actions. Highlighting how stakeholder feedback informs decisions, shapes sustainability priorities, or leads to specific actions allows the reader to see a direct link between stakeholder input and real-world decision-making. The 2024 Eni Annual Report is a good resource here.
Some areas for improvement were also identified. First, when the priorities of different stakeholder groups are reported, it would be beneficial to explain how exploratory and open-ended the approach was. Then, companies could provide more clarity on timelines, especially if a direct engagement in the context of materiality assessments is carried out, and how regularly engagement methods are used with different groups. And finally, in most cases, it wasn’t clear when proxy stakeholders’ views have been used, or where they would have been most useful. Which proxies would be legitimate, (e.g. for worker or community voice), and which would have the most authoritative insights? For example, ESRS S1 on own workforce matters requires engagement with employee representatives. According to professional services firms, this standard would benefit from additional implementation guidance.
In addition to the recommendation to map and visually present IROs in the value chain, it appears that greater attention should be paid to the end-of-life of services and products. This gap was identified in some of the reports and value chain mappings reviewed. A word to the wise!
Despite their great heterogeneity, the first wave of CSRD-compliant sustainability statements provides a valuable source of good practices and numerous areas for reflection for future exercises. In the hope that the ambitions of the CSRD will be maintained with a critical mass of companies participating in this common framework to see a coalescence around agreed good practices, incisive sectoral guidelines, the development of shared data sources, etc., businesses hope additional guidance will be prepared by the European institutions on double materiality assessments, sustainability assurance and voluntary sectoral standards or guidelines that would contribute to effective implementation and consistency within and across sectors.
Neela Couture, Sustainability Adviser – Governance
