Workiva Report Raises Concerns About CSRD Readiness Among EU Companies - Seite 2

Collaboration is in the spotlight

Despite the CSRD mandate requiring companies to integrate both financial and sustainability information into their annual reports, only 10 percent of those surveyed are currently working to improve collaboration between finance and sustainability. Similarly, only 10 percent are actively working on improving collaboration between finance and risk, while a mere six percent are focused on integrating finance, sustainability, and risk. UKI companies were slightly ahead of Europe, at 12 percent—despite not necessarily needing to comply with the CSRD—while DACH lags further behind, at eight percent. This indicates that, while improvements are being made, it’s not clear whether existing plans to optimise collaboration between finance, sustainability, and risk to meet CSRD demands are going far enough.

“There is a clear lack of in-depth understanding when it comes to the requirements of integrated reporting—particularly in regard to CSRD compliance and the timelines needed to establish, test and optimise a truly cross-functional reporting structure,” continued Saito. “Organisations simply won’t be able to approach CSRD compliance with a ‘trial-and-error’ approach; the demands are far more complex than anything that has come before—and will only continue to increase.”

Optimise processes with technology

With the need to integrate finance and sustainability, organisations need to rethink their existing processes and develop a roadmap for incorporating both their financial and sustainability (non-financial) data with audit and controls into their reporting process. Indeed, finance reporting teams may be accepting of current workloads, but if teams are working with largely manual processes, they will struggle to absorb the shock of the CSRD. Forty-six percent of respondents are actively integrating or have already integrated tech into their reporting processes, with the UKI and DACH ahead of Europe in this area, at 52 percent and 50 percent respectively.

“The CSRD is a north star for organisations and is changing perceptions surrounding annual reporting—but companies are unprepared and are not moving quickly enough to meet new demands,” concluded Saito. “European companies may be ahead of the curve in terms of incorporating ESG into annual reporting strategies, however this is often because they have to be, rather than because they are genuinely in control. Businesses must prioritise cost-effective, efficient solutions as they work towards optimising their processes.”