Embarking on a CSRD compliance initiative is a multi-step process, typically taking around 8 months, depending on the company’s maturity in ESG reporting. Each phase of the project must be carefully managed to ensure timely completion and adherence to compliance standards. Below is a detailed breakdown of the main deadlines your team should keep in mind while working through the CSRD reporting journey using our software. Each phase is vital to achieving compliance and improving ESG reporting quality.
1. Finalization of the Double Materiality Assessment
Description: This initial phase helps the company determine which ESG topics are material to their business, based on a structured process using our software. It consists of filling forms that compute materiality scores, and once completed, companies must decide which ESG topics are deemed material or not.
Outcome: The determination of the material topics will trigger the definition of the perimeter of data points to report, which then enables the transition into the data collection phase.
Timeframe ⏳: The double materiality process requires at least 3 weeks from start to finish.
Challenges: Depending on the number of forms and the internal discussions regarding materiality, this phase could extend longer if the company is new to materiality assessments.
2. Finalization of the Data Collection and Gap Analysis
Description: Once the material topics are defined, companies need to collect relevant data points. Depending on the double materiality results, there may be hundreds of data points to gather, including complex information such as climate targets, employee data, and specific ESG policies. Following the data collection, companies must conduct a gap analysis through our platform to evaluate the quality and compliance of the data in accordance with CSRD requirements.
Outcome: The gap analysis identifies areas where data is missing or non-compliant, offering insights into where further improvement is needed.
Timeframe ⏳: Data collection typically takes 3 months, although it heavily depends on the availability and readiness of the required data. The gap analysis phase should take an additional 1 to 2 weeks.
Challenges: Data availability and coordination between departments may cause delays. If some data points are not readily accessible, the timeline can extend beyond two months.
3. Finalization of the ESG Reporting Improvement Roadmap Design
Description: Following the gap analysis, the company must create a roadmap to improve its reporting, with a focus on compliance and quality. This process involves prioritizing the most critical issues identified during the gap analysis.
Outcome: A clear, actionable plan is designed to enhance future reporting and address any deficiencies that might prevent full CSRD compliance.
Timeframe ⏳: This roadmap design phase should take at least 1 month.
Challenges: Aligning internal priorities and stakeholder expectations can extend the timeline. Coordination across departments is crucial for developing a comprehensive improvement plan.
4. Finalization of the Sustainability Report
Description: After or in parallel of the Roadmap design, the company must write its Sustainability Report, incorporating all data collected and ensuring the structure complies with CSRD standards (organized by ESRS chapters, detailed by disclosure requirements, and using XBRL tagging, etc). Our software will automatically generate the raw content, but the company will still need to refine and tailor the content.
Outcome: A polished, compliant Sustainability Report ready for submission.
Timeframe ⏳: This phase will take at least 1 month but could be longer depending on the complexity of content customization, visual elements, and adherence to branding guidelines.
Challenges: Customization requirements and XBRL tagging validation may extend the timeline.
5. Finalization of the Audit Process
Description: After the Sustainability Report is completed, it must be reviewed by a third-party auditor to ensure its compliance with CSRD standards. The audit assesses the accuracy and completeness of the data, as well as the company's reporting processes.
Outcome: An audited Sustainability Report, which can then be submitted for CSRD compliance.
Timeframe ⏳: The audit phase typically takes at least 1 month, but can take longer depending on the level of assurance required and the auditor’s availability.
Challenges: The number of data points to review and the auditor's schedule may prolong the timeline. Early coordination with the auditor is advisable to ensure timely review.
Next Steps: Once the audit is finalized, the company can submit its report to the relevant authorities and consider continuous improvements for the next reporting cycle.
By clearly understanding each phase and its associated deadlines, your company can ensure a smooth and efficient journey towards CSRD compliance. Allocating sufficient time for each process, particularly data collection and the audit, is essential for successful reporting.