The Corporate Sustainability Reporting Directive (CSRD) is bringing about major changes to how companies across Europe handle sustainability reporting. 

With over 1,100 data points to consider, a workload of an estimated 375 hours, and deadlines approaching fast, businesses must act quickly to ensure compliance and avoid potential penalties. 

In this blog post, we’ll break down the current CSRD timeline and offer a clear, five-step CSRD roadmap to guide your company through the compliance process–before it’s too late.

First of all: here’s what the CSRD timeline looks like right now 

The CSRD will roll out gradually based on a company’s size, revenue, and location. Here are the key dates to note down:

• 2024: Companies already subject to the Non Financial Reporting Directive (NFRD) must comply, with first reports due in 2025.
• 2025: Large enterprises meeting any two of these criteria — more than 250 employees, over €50 million in net turnover, or assets exceeding €25 million— must comply, with first reports due in 2026.
• 2026: Listed SMEs, including small (50-249 employees, €10-50 million turnover, €5-25 million assets) and micro (10-49 employees, €900,000-10 million turnover, €450,000-5 million assets) companies, must comply, with first reports due in 2027.
• 2028: Non-European entities with significant operations or market listings in Europe must comply, with first reports due in 2029.

CSRD roadmap: preparing for CSRD compliance in 5 steps 

Now that you’ve got the key dates in mind, let’s walk through five steps to achieving CSRD compliance, from building your sustainability team to submitting your final report for auditing.

Step 1: Start the reporting process

Set up sustainability team

The first step to achieving CSRD compliance is building or expanding your sustainability team. Depending on your company size, this means hiring or training one or more professionals with specialized knowledge in sustainability reporting and compliance. 

This team will be responsible for managing the CSRD compliance process, ensuring all sustainability data is collected, assessed, and reported accurately.

Engage an auditor early

Under the CSRD, sustainability reports must be verified by independent auditors to ensure data is accurate and reliable.

Finding an auditor familiar with the CSRD is essential, and Coolset can help. Alongside our platform, we give you access to a trusted network of vetted auditors. They can offer guidance and check-ins throughout the reporting process, ensuring your reporting is on track and compliant with the latest standards.

Step 2: Conduct a double materiality assessment

Not all topics under the European Sustainability Reporting Standards (ESRS) need to be included in your annual sustainability report–only those deemed “material” to your business. 

Conducting a double materiality assessment is a mandatory step that helps you figure out which ESRS subtopics must be included. It ensures your reports focus on topics that are truly relevant, instead of topics that may align with a company's preferences or perceived importance. 

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Here’s how to conduct a double materiality assessment:

1. Develop a list of Impacts, Risks, and Opportunities (IROs)

Start by compiling a comprehensive list of potential IROs through internal expertise and desk research. This list will serve as the foundation for your materiality assessment.

2. Engage key stakeholders 

Validate the IROs by engaging key stakeholders through surveys, interviews, and workshops. Their input will help refine and prioritize the most significant issues.

3. Map IROs to relevant ESRS sub-topics

Once validated, align each IRO with the appropriate ESRS sub-topics, ensuring that all relevant areas are covered.

4. Score each IRO

Assess each IRO based on specific criteria. For impact, consider the scale, scope, irremediability and likelihood. For risks and opportunities, evaluate magnitude and likelihood. This scoring process helps to prioritize the most critical issues.

5. Determine material subtopics

Set a threshold to identify which subtopics are material to your organization. This step is crucial as it determines what will be included in your final report.

For more guidance, download our free Double Materiality Assessment guide below.

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Step 3: Align with the European Sustainability Reporting Standards (ESRS)

Initiate data collection 

Start the data collection process for all material ESRS topics. This involves sending data requests to relevant departments, such as finance and HR, to compile the necessary information.

Report on all material data points 

Ensure that you collect and report data on all material topics identified during your double materiality assessment.

Include ESRS 2 data points 

In addition to the material topics, ESRS 2 data points, which cover broader reporting processes, must always be disclosed.

Step 4: Reporting

Report how double materiality assessment was conducted

The next step involves clearly reporting how your double materiality assessment was conducted and which material matters emerged. While not mandatory, including a materiality matrix (shown below) can be a helpful tool to visually prioritize and clarify the significance of sustainability topics.

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Good to know: Coolset’s double materiality feature automates this entire process by helping you collect and score data from stakeholders, and visually summarize the results in a matrix for better decision-making and reporting.

Disclose ESRS data points

Structure your report by first disclosing ESRS 2 data points, followed by the topical material ESRSs. This ensures that your report is organized and meets all CSRD requirements.

Step 5: Submit your report for auditing

Optional: Conduct a ‘dry run’

Given the CSRD’s complexity and heavy workload, many proactive companies are preparing with a 'dry run' to assess their readiness to report in line with these new requirements. This can help to catch any potential compliance gaps and ensure your report is as strong as possible.

Submit your report to the auditor

Once your report is finalized, share it with your auditor for review. They will ensure that it meets all CSRD standards and provide any necessary feedback.

Get in touch with Coolset to demo our CSRD software solution

For mid-market companies, getting your head around the CSRD can feel overwhelming. Thankfully, tools like Coolset’s sustainability and compliance software can make the process a whole lot more manageable. 

Coolset streamlines everything above–from data collection to reporting and auditing–ensuring your company meets the CSRD’s detailed requirements with ease.

Developed in collaboration with regulators and auditors, Coolset's CSRD compliance module is designed specifically for mid-market businesses and includes several key features:

• Double materiality assessment guidance: Use built-in surveys to engage stakeholders and assess both impact and financial materiality.
• Adaptive ESRS disclosures: Coolset dynamically unlocks only the ESRS topics that are relevant based on your double materiality assessment. This ensures you only report on what’s truly material, saving time and resources. 
• CSRD-compliant reporting: Generate machine-readable, audit-ready reports and connect with a network of auditors for seamless assurance.

Kick-start your compliance journey by booking a free personalized demo with one of Coolset’s climate experts today.

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