Luis Piacenza - CSRD Readiness Assessment

CSRD Readiness Assessment

Is your company prepared to meet the new sustainability reporting requirements?

Crowe Spain
Luis Piacenza - CSRD Readiness Assessment

The world is changing, and the climate crisis is challenging existing business models. Laws, regulations, and sustainability reporting requirements are evolving rapidly to tackle climate change. 

The new European Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS) pose a significant challenge for companies, introducing new principles that must be integrated throughout the value chain. Additionally, the directive's implementation deadlines are approaching, underscoring the importance of assessing readiness levels as soon as possible.

¿When to start reporting with ESRS?

In January 2024, companies subject to the Non-Financial Reporting Directive (NFRD) – specifically, large publicly listed entities, financial undertakings, and insurers with more than 500 employees – must compile information in accordance with ESRS to submit their reports in 2025.

Subsequently, companies meeting two of these three conditions - more than 250 employees, a total balance sheet exceeding €25 million, and a net turnover surpassing €50 million - must begin using ESRS in January 2025 to submit their report in 2026.

Initiating the identification of compliance levels with the new standards is imperative. Before embarking on the adaptation process to the new directive, conducting a Readiness Assessment is essential. This assessment helps identify which ESRS are covered by existing information and systems and which ones require further attention.

ESRS: Understanding the pillars of the new paradigm.

ESRS serves as the backbone of a new standard system aimed at transforming how companies report on sustainability. This set of standards covers a diverse range of topics, from general principles to sector-specific standards.

The new standard system is divided into three fundamental categories. Firstly, the 'cross-cutting standards' form the core of the system. ESRS 1 establishes general information principles according to the directive's proposal, and ESRS 2 addresses how companies should integrate sustainability into their business strategy by identifying impacts, risks, and opportunities.

Secondly, the 'topical standards' focus on specific information requirements related to sustainability impacts, risks, and opportunities deemed material for the reporting company, irrespective of the sector. These include environmental standards (ESRS E1 to E5), social standards (ESRS S1 to S4), and governance standards (ESRS G1).

Thirdly, the 'sector-specific standards' (not publicly available yet – the expected adoption by the European Commission is before June 2026) will require companies in certain sectors to report on aspects considered material for their specific operations, applying compliance metrics.

This comprehensive structure, interoperable with GRI Standards, allows for consistent information organization, promotes comparability across sectors, and facilitates navigation through information. This process is designed to align the reports with the CSRD, ensuring consistency and balance in sustainability information disclosures.

Discover your ESRS Compliance Level

Given the imminent changes in how information is presented, at Crowe, we provide our "CSRD Readiness Assessment" at no cost. This online evaluation tool assists companies in identifying the readiness level of available sustainability information according to ESRS.

With this tool, we can offer a clear view of which indicators or requirements are already covered and which ones need attention, even before conducting the materiality analysis*, within 20 minutes.

After the analysis, we facilitate a recommendation report with instructions to start the process in a timely manner. It is ultimately the starting point to identify the steps that must be taken to meet the requirements of each ESRS.

With the results of the Readiness Assessment, we recommend downloading our CSRD Adaptation Guide, where we share the 5 steps to follow.

CSRD represents a fundamental shift in how companies report on sustainability management and its impacts. Early preparation and the use of Crowe's CSRD Readiness Assessment are not only necessary but can also become an opportunity to define or update the Sustainability Strategy.

CSRD Readiness Assessment

Discover the readiness level of your sustainability information in accordance with the new European ESRS standards.

*The CSRD Readiness Assessment evaluates the entire set of ESRS standards, regardless of whether, after conducting the materiality analysis, some aspects are deemed irrelevant or inapplicable. This assessment aims to provide a quick and comprehensive response to the current state of the company. It is a voluntary exercise to facilitate Gap Analysis and adaptation to CSRD.