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Companies subject to the Corporate Sustainability Reporting Directive (CSRD) must prepare their reporting according to the European Sustainability Reporting Standards (ESRS) and EU Taxonomy.  

Even though the ESRS is still changing – a timely start and a substantial effort is required for your company to be ready according to the timeline provided by the EU. ESG requires a cross-functional collaboration between many departments, where the CFO Office can take a leading role.   

If you are trying to get started, the following steps can be considered: 

This journey starts by composing the right team and engaging with key stakeholders, while the double materiality assessment will indicate the areas on which you should report. As part of the value chain with customers and suppliers, you must collect and disclose data for and from them. Furthermore, the EU Taxonomy regulation requires mapping data to the correct EU Taxonomy for reporting purposes.  

During your assessment, you may find out that not all data is currently available or suitable for ESG reporting. Proxies, such as industry benchmarks, can be used, but will reduce the applicability of your ESG report. Eventually, customers and regulators will ask for actual data. Later, long- and short-term targets will be set to reduce emissions. These will be spread throughout the organisation to meet the set targets.  

The magnitude of work required to prepare for ESG reporting cannot be underestimated.  

The process of planning, controlling, implementing workflows, process controls, and audit trails for ESG reporting is remarkably familiar to the current procedures followed by the CFO Office for financial closing. Additionally, some financial and non-financial data collected for financial consolidation and reporting is also used for ESG reporting  

The IFRS Foundation has published an integrated reporting framework, which promotes a broad approach to corporate reporting that addresses stakeholders’ demands, creates a foundation for future standards, and integrates ESG goals and performance. Applying this framework will lead to an integrated report with both financial data for the annual report and ESRS data for ESG reporting to meet all stakeholders’ demands.  

Considering the factors above, an increasing number of companies are incorporating their finance teams into projects to capitalize on their expertise and tools for tasks and data collection, validation, aggregation for reporting, and analysis. After the implementation of ESG reporting has been done, the CFO Office remains having a substantial role because of their expertise in data and process governance, planning, reporting and disclosures.  

So, be prepared to act and investigate the current financial consolidation, reporting, budgeting and planning application(s) used. Can these applications support the ESRS framework for collecting, aggregating, calculating, and reporting non-financial data and disclosures, as well as for setting targets, planning, and measuring progress for ESG reporting?  

On April 9th, 2024, inlumi will host a webinar with 2BHonest on how to get started with ESG Disclosure Reporting, Analysis & Planning. You can register via this link. 

Getting started on your ESG journey with inlumi. 

At inlumi, we offer comprehensive support for your ESG disclosure reporting, analysis, and planning strategy. Our range of services includes: 

  • Readiness assessment for ESG reporting (including organisational design, data quality and processes)  
  • Change impact assessment  
  • Reporting and steering model strategies  
  • Technology evaluation and selection  
  • End-to-end solution implementation and change management  
  • Business as usual (BAU) governance strategy and solution application management 

Marco van der Kooij

Consulting Director at inlumi 

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