Workiva Report Raises Concerns About CSRD Readiness Among EU Companies

The majority (94%) of European organisations surveyed are working to become compliant with the CSRD (Corporate Sustainability Reporting Directive) by 2024, but their lack of decisive action is putting them at risk of running out of time, according to a second annual report by Workiva Inc. (NYSE:WK), the world’s leading cloud platform for assured integrated reporting. Furthermore, as reporting teams continue to accept and absorb an ever-increasing workload, they are underestimating the volume of work that lies ahead of the CSRD deadline.

CSRD influence on annual reporting

According to the Workiva report, “Annual Reporting Barometer 2023: Facing up to the CSRD,” surveying more than 500 finance leaders across Europe, 59 percent of respondents that aren’t even required to comply with the CSRD are still planning on doing so entirely voluntarily. The impact of the CSRD is clearly being felt, with more than three quarters (77%) of businesses surveyed revealing that ESG now has a moderate or major influence over their annual reporting strategies. For 73 percent of respondents in the DACH region and 67 percent in the UK and Ireland (UKI), ESG now has a moderate or major influence.

Companies underestimate the work ahead

While European organisations are driving toward change, with 43 percent of respondents planning to spend about the same amount of time as last year on financial transformation over the next 12 months, finance teams find themselves persistently accepting and absorbing an ever-increasing workload, indicating a frustratingly slow pace of progress. Over one third (37%) of respondents admitted to feeling overwhelmed and exceeding their capacity during the previous reporting period. In the UKI, companies felt the most pressure, with 60 percent being over capacity. It comes as no surprise that 41 percent asked for more time during next year’s reporting period.

“The CSRD mandate is already having a significant impact on the reporting landscape,” said Erik Saito, senior vice president and general manager of EMEA at Workiva. “Many reporting teams are at or near capacity and will be challenged by the workload pressure of additional CSRD reporting requirements—including additional disclosure, auditor assurance, and XBRL tagging—which will drive many to leverage new technology solutions. Workiva has the ability to help companies meet these complex regulatory requirements and reduce the chaos surrounding reporting."