CSRD reporting poses a challenge for organisations – where to start? Read our experts’ tips for the CSRD process

Sustainability is already a competitive advantage for many companies today, but new reporting requirements bring new challenges. The Corporate Sustainability Reporting Directive (CSRD) imposes obligations on hundreds of Finnish companies – but how have business decision-makers experienced it in practice? A study commissioned by communications agency IR Partners and environmental consulting firm UseLess Company examined how corporate decision-makers perceive the CSRD reporting process and the double materiality assessment.

A webinar was held to present the study’s findings, featuring speakers Hanne Mäkelä from IR Partners, Mervi Teerikangas from UseLess Company, Tapio Nelimarkka from Relais Group, and Jutta Valkeinen from Lounea.

The recent study reveals that many companies face challenges in interpreting reporting standards, particularly in the area of environmental responsibility, specifically regarding emissions reporting, biodiversity impacts, and the circular economy. How can these challenges be addressed? We have compiled the key findings of the study and tips from the experts.

Emissions reporting and emissions reduction plans are seen as the biggest challenges

In the study, emissions reporting and the development of an emissions reduction plan were identified as the most challenging aspects of environmental issues. In particular, companies with long value chains find it difficult to carry out emissions calculations.

Tapio Nelimarkka of Relais Group highlighted the difficulty of calculating Scope 3 emissions: “Scope 1 and 2 emissions are still manageable, but Scope 3 poses a particular challenge for us in terms of global supply chains—for example, collecting data from outside the EU can be very difficult.”

Biodiversity is seen as difficult – but a bold start moves us forward

29% of respondents highlighted modeling and reporting biodiversity impacts as a challenging area.

Mervi Teerikangas of UseLess Company comments: “It’s understandable that biodiversity is seen as a challenging topic, since established standardised calculation methods aren’t yet available. My advice, however, is to boldly start with the big picture, even if not all the data is available yet. The most important thing is to continuously develop reporting and, based on the results, strive to adapt business operations to fit within the limits of our planet.”

Getting started with biodiversity reporting is often the hardest part. Practical first steps can include, for example, a preliminary assessment of the impacts of operations and setting goals related to impact management.

The circular economy opens up opportunities for business

8% of respondents cited the circular economy as the biggest challenge in CSRD reporting. However, the circular economy holds significant opportunities for business development.

Jutta Valkeinen of Lounea shared a concrete example. Through the duality process, Lounea identified the recycling of IT equipment as a business opportunity: “Initially, investments in recycled IT equipment were fairly small. However, through stakeholder feedback and the process, it became clear that greater investment is a clear desire and opportunity for our business. The company’s management took the matter seriously and recognised its potential.”

Developing a circular economy can therefore start with even small steps, as long as an organization listens to its stakeholders and systematically identifies potential business opportunities.

Social responsibility under control – but the value chain poses challenges

Social issues, such as those related to working conditions and human rights, did not emerge as major challenges in the survey. In Finland, companies have traditionally handled these matters well. However, value chain management is an exception: 25% of respondents identified challenges, particularly in assessing and managing the conditions of workers along the value chain.

Global supply chains, in particular, can pose challenges when information on working conditions or human rights impacts is difficult to obtain. Solutions to this can be found in improved monitoring and reporting processes and tools, and above all, close collaboration with partner networks.

Interested in developing your company’s sustainability reporting? We can help you build a clear and impactful reporting framework.