We’re seeing a exponential increase in demand for finance professionals who can help our clients meet their ESG/sustainability goals, and ensure that they can not only comply with current and upcoming legislation but also meet the demands from clients and customers for accurate data.

After a hugely successful leadership event earlier this year, we wanted to provide finance leaders with more resources to help them manage the challenges of ESG/sustainability reporting.

The Takeaways

Our Webinar Guest

Anne-Marie Schoonbeek, COO & Co-founder of KEY ESG joined us on this webinar to discuss the challenges of ESG/sustainability reporting and take a deep dive into CSRD, the most recent and comprehensive legislation to date. KEY ESG is a global provider of ESG management software for companies and investors at all stages of ESG maturity.

In addition to her role as co-founder and COO of KEY ESG, Anne-Marie shapes ESG regulations, such as CSRD, as a working group member at leading advisory associations, such as XBRL. Anne-Marie has a detailed understanding of best-practices around new ESG data collection and reporting requirements and helps KEY ESG’s clients to implement ESG strategies which drive value creation opportunities and well as regulatory compliance.

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Summary

• Meeting ESG challenges will require a collaborative, cross departmental/divisional approach and finance leaders will need to ensure they have the right talent, technology, processes and skills (and mindset) within Finance and the wider business to achieve their goals.
• ESG regulations, particularly CSRD (Corporate Sustainability Reporting Directive), are currently a major focus for finance leaders. Even if these regulations don’t directly apply to your business now, they might impact your suppliers, business partners, or customers, prompting them to ask you about compliance.
• The sustainability regulatory landscape is evolving rapidly, with numerous frameworks emerging globally. While there are many, they share common themes and data requirements.
• By focusing on CSRD in this session, we address one of the most comprehensive and impactful regulations currently being implemented.

CLICK HERE TO WATCH THE WEBINAR

Introduction to CSRD

CSRD requires extensive reporting on sustainability metrics, affecting both listed and large private companies. The regulation aims for transparency and comparability across organizations.

It’s important to remember that ESG covers more metrics than just Environmental – easy to forget given the extensive focus on this metric that it also includes social and governance so standards will also include areas such as health & safety, workforce (including workers in the value chain) business conduct etc.

Because this is regulatory required, this needs to be investor-grade, and ready for audit.

• CSRD will be phased in, starting with large entities and eventually encompassing smaller organizations. Key criteria include turnover, assets, and workforce size.
• The directive specifies both qualitative and quantitative data points across various sustainability dimensions, including climate, social metrics, and governance.
• The EU’s goal is a common language around sustainability reporting and a level playing field for businesses.
• It will be phased in it different tiers starting this year.
• The data will be publicly accessible and will require Mandatory Limited Assurance at first and then Mandatory Assurance.

Double Materiality and Reporting

There are over 1000 data points within the standards and disclosure requirements. To comply with CSRD, organizations must conduct a double materiality assessment to determine which sustainability issues are most pertinent. This involves looking at your business through two lenses:

Impact Materiality: Assessing the organization’s impact on the environment, economy, and society. Whether positive/negative and currently/in the future.

Financial Materiality: Evaluating how sustainability issues affect the organization’s financial performance and risk profile.

Anything that sits within one of these two areas is material.

A good starting point is to look at the EU’s suggested long list of 92 ‘Sustainability Matters’.

How to approach this?  

Review the long list of sustainability matters: 92 in total.

Assess and finalise your Double Materiality short list: Identify the most relevant sustainability issues based on impact and financial materiality. This will involve engaging with stakeholders including suppliers, employees, local community. **Think about the existing information and data you have from supplier/vendor reports, employee surveys etc – there’s a lot of information out there you can leverage !**

Getting Assurance Ready:

Be prepared to explain the process not just the outcomes: You will need to explain to auditors why you deemed a certain metric to be material not just the outcome of the assessment.

Gap Analysis: Compare your current data and processes against CSRD requirements to identify areas for improvement.

Prepare for Reporting: Ensure your data collection and reporting processes are robust, transparent, and capable of meeting regulatory standards.

Conclusion

Understanding and complying with sustainability regulations like CSRD is crucial for staying ahead in today’s regulatory environment. simplify this process, enabling you to focus on what matters most: driving sustainable value and ensuring compliance.

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TalentEdge have over 15 years’ experience helping our clients hire exceptional finance talent to meet the requirements of a constantly evolving business landscape. As the demand for ESG reporting has increased we have focused on building a strong, diverse pipeline of accounting professionals with the skills and experience required to meet our client’s needs. If you would like to discuss hiring expertise in this areas contact Lucy Davison to find out more.

KEY ESG supports companies to fulfil every stage of the CSRD compliance process in the most automated and AI-assisted way possible. The software platform guides users through the double materiality process, integrates directly with the corresponding ESRS data points, manages the workflows for data collection and delivers audit ready reports in-line with XBRL digital tagging requirements. If you would like to find out more about how KEY ESG software can simplify and streamline your CSRD compliance process, please contact Anne-Marie Schoonbeek on aschoonbeek@keyesg.com